Spint Settles 'Cramming' Suit, Offers Up to $50M in Relief


Sprint Corp has agreed to provide as much as $50 million of consumer relief to resolve a U.S. government lawsuit accusing the mobile carrier of letting third parties tack unauthorized charges on to customers' bills, a practice known as cramming.

The settlement was expected to be one of the announcements at a press conference later on Tuesday called by the U.S. Consumer Financial Protection Bureau, the Federal Communications Commission and state attorneys general.

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AT&T Inc and T-Mobile US Inc had previously settled similar cramming cases with the government, leaving the largest mobile company Verizon Communications Inc the only one of the top-four carriers yet to face such scrutiny.

A Verizon spokesman declined comment.

Sprint's settlement was disclosed in a proposed final judgment filed on Tuesday in Manhattan federal court.

It resolves allegations that from 2004 to 2013, Sprint let third parties charge consumers tens of millions of dollars for services such as ringtones or text-message horoscopes that the consumers had not requested, while keeping 40 percent of the gross revenue.

Sprint, the third-largest U.S. carrier, did not admit or deny the CFPB's allegations, except as specifically stated in the proposed final judgment.

A CFPB representative declined comment and the FCC representatives could not immediately be reached.

(Reporting by Jonathan Stempel in New York and Alina Selyukh in Washington; Additional reporting by Emily Stephenson; Editing by Chizu Nomiyama and W Simon)