December 3, 2015Low Credit Score

The FTC alleged that Sprint placed consumers with lower credit scores in an Account Spending Limit program.  This program required consumers to pay a monthly fee of $7.99 in addition to the regular charges for cell phone and data services.

Sprint failed to give many consumers required notification 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 without paying reoccurring charges.

Sprint bills customers after services are utilized and are subject to the requirements of the Fair Credit Reporting act and its Risk-Based Pricing Rule.   The Rule requires that companies must inform consumers whenever they are offered services on less favorable terms as a result of their credit scores.

Sprint settled with paying a $2.95 million penalty and agreed to abide by the rules in the future.   Sprint is also required to give notice to consumers that enables them sufficient time to avoid reoccurring charges and the ability to opt out of the plan.