Sprint to pay $2.95M CMP for FCRA violations
The Federal Trade Commission has announced that mobile service provider Sprint will pay $2.95 million in civil penalties to settle charges that the company failed to give proper notice to consumers who were placed in a program for customers with lower credit scores and charged an extra monthly fee. The complaint filed by the FTC alleges that Sprint placed consumers with lower credit scores in an Account Spending Limit (ASL) program. The ASL program requires consumers to pay a monthly fee of $7.99 in addition to the charges for cell phone and data services. Because Sprint allows customers to be billed for services after they are used, they are subject to the requirements of the Fair Credit Reporting Act and its Risk-Based Pricing Rule. The Rule requires that companies inform consumers whenever they are offered service on less favorable terms, such as the ASL program, as a result of information from their credit reports or scores.