Sprint facing lawsuit over bogus charges on bills

The Consumer Financial Protection Bureau is suing wireless carrier Sprint, claiming the company illegally billed customers tens of millions of dollars in unauthorized charges.

The suit follows reports the Federal Communications Commission would fine Sprint a record $105 million for "cramming," a practice where a wireless carrier allows outside parties to add charges to customers' bills without their consent.

The CFPB claims Sprint received complaints about the charges, but ignored them.

"Consumers ended up paying tens of millions of dollars in unauthorized charges, even though many of them had no idea that third parties could even place charges on their bills," says CFPB Director Richard Cordray in a statement. "As the use of mobile payments grows, we will continue to hold wireless carriers accountable for illegal third-party billing."

The agency says most customers were targeted online by third-party companies who tricked users to giving their cell phone numbers, then charging their accounts without consent. The CFPB says charges ranged from one-time fees as high as $4.99 to subscriptions costing $9.99 a month.

Cordray says in many cases, Sprint refused to offer refunds, instead providing information on blocking future charges. "Sprint mistreated consumers egregiously by creating a billing system that invited illegal third-party charges and processed them in a highly irresponsible manner," he says.

In a statement, Sprint spokesperson Roni Singleton says the company is "disappointed" in the move, adding the carrier encourages customers to reach out to resolve any issues with third-party charges.

"Sprint took considerable steps to protect wireless customers from unauthorized third-party billing and is an industry leader in proactively preventing unauthorized charges," says Singleton.

Sprint becomes the latest carrier facing potential penalties over "cramming." In August, the Federal Trade Commission accused T-Mobile of the practice, claiming they added "millions of dollars" of bogus charges to customer bills. T-Mobile CEO John Legere said the claims were "without merit."

Last month, AT&T agreed to pay $105 million to federal and state authorities to settle "cramming" claims.

Follow Brett Molina on Twitter: @brettmolina23.