Sprint will pay the Federal Trade Commission a fine of $2.95 million for failing to properly disclose extra monthly fees billed to customers with lower credit scores.
Between November 2013 and June 2014, Sprint enrolled customers with inferior credit scores in the Account Spending Limit (ASL) program — and added a $7.99 monthly fee on top of their standard service charges.
“Sprint failed to give many consumers required information about why they were placed in a more costly program, and when they did, the notice often came too late for consumers to choose another mobile carrier,” said Jessica Rich, director of the FTC’s Bureau of Consumer Protection. “Companies must follow the law when it comes to the way they use consumer credit reports and scores.”
In addition to its failure to fully disclose the credit-based billing practices, Sprint omitted required information about credit report data. According to the FTC, Sprint would often provide the relevant materials only after customers were beyond the 30-day trial period and unable to change carriers without incurring ETFs.
Sprint admitted no wrongdoing in settling the charges, and said, “Sprint puts its customers first and is always working to provide clear and necessary information to customers. We appreciated the dialogue with the FTC and we have already implemented the changes requested.”
