Sprint to Face Record Fine Over Unauthorized Customer Charges

By Gautham Nagesh 

WASHINGTON--The Federal Communications Commission is preparing to fine Sprint Corp. a record $105 million over allegations the company charged consumers for unwanted text message alerts and other services.

An FCC official confirmed that the agency is preparing to fine Sprint for billing customers for text message alerts, horoscopes, sports scores, ring tones and other unwanted services--a practice known as cramming. The fine would tie an AT&T Inc. settlement over similar charges earlier this year as the largest in FCC history.

Regulators have targeted a number of carriers for cramming, with the Federal Trade Commission suing T-Mobile US Inc. in addition to AT&T's settlement with the FCC. Consumers that believe they have been overcharged by Sprint would be eligible for compensation once the fine is approved, according to the official. The dollar amount of the fine is based on the total amount regulators believe Sprint overcharged consumers.

According to the official, the FCC's probe focused on a three-month window from August to October 2013, during which they said Sprint received almost 35,000 complaints from consumers about the unwanted charges. The FCC alleges Sprint's actions were a willful violation, and proposes the company forfeit $105 million to resolve the investigation.

Both Sprint and the FCC declined to comment.

Three of the five FCC Commissioners have indicated they will vote in favor of the fine, according to the official. It is unclear whether Sprint is currently engaged in settlement talks with the FCC. The official said the investigation was coordinated with the Consumer Financial Protection Bureau, and various State Attorneys General.

The FCC's plan was first reported by National Journal.

Write to Gautham Nagesh at [e-mail]

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