FTC calls Sprint on $2.9 million risk-based pricing violation

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Two people walk into a deli and both order a pastrami on rye. When the check arrives, one is charged $8. The other is surprised to get a bill for $15.99. That’s not the start of an old Henny Youngman joke. It’s an analogy that raises some of the issues in the FTC’s proposed $2.95 million settlement with Sprint for allegedly charging customers with lower credit scores a monthly fee without giving them the proper up-front notice required by law.

The FTC’s lawsuit centers on mobile service provider Sprint’s Account Spending Limit Program. Under the program, consumers with lower credit scores were charged a monthly fee of $7.99 on top of what they already had to pay for cell phone and data service. But here’s the thing: Many consumers didn’t know they had been “enrolled” in the program and weren’t given mandatory information that would have made it possible for them to do meaningful comparison-shopping before they were locked in. The FTC says that by tacking that extra $7.99 fee onto consumers' monthly bills without making required disclosures, Sprint violated the Fair Credit Reporting Act and its Risk-Based Pricing Rule.

Because Sprint bills consumers for services after the fact, the company is covered by the Risk-Based Pricing Rule. Under the Rule, if consumers are offered service on less favorable terms based on their credit report or credit score, the company has to inform them of that fact by giving them what the Rule calls a risk-based pricing notice.

But according to the complaint, in many cases Sprint failed to provide customers it placed in its Account Spending Limit Program with all of the required disclosures. The FTC says Sprint’s notices omitted key information necessary for consumers to determine if their lower credit scores were based on errors in their consumer reports. That’s a particularly important consideration, given FTC studies showing that credit reports often contain mistakes that can have a major impact on what people have to pay for things like cell phone service.

Sprint's timing raised concerns, too. The complaint alleges that Sprint often gave consumers the required notices too late for them to shop around for a better deal without having to cough up a hefty early termination fee.

In addition to a $2.95 million civil penalty, the proposed settlement requires Sprint to comply with the Risk-Based Pricing Rule. But that’s not all. From here on in, Sprint will have to give customers the required notice – this time, with complete information – within five days of signing up for Sprint service or by a date that gives them the ability to avoid recurring charges like those in the Account Spending Limit program. Sprint also has to send corrected risk-based pricing notices to consumers who received incomplete notices from the company.

Do your company’s practices put you at risk for a Risk-Based Pricing Rule violation? One important compliance tip: Make sure your notices give consumers all the information required by law. Read Using Consumer Reports for Credit Decisions: What to Know About Adverse Action and Risk-Based Pricing Notices for guidance.



I merged over with sprint from Nextel I wasin not any any spending limit program when I was with Nextel soon after the merge I was being charged 5.99 I think it's gone up too 7.99 in the last two or three years I called and asked to be removed just on the fact that the line has been Active over nine years. But nope also my Credit score is a lot better than what it was when I was 18

I was charged this "spending" limit fee for over 4 years. Not only that I was charged a "lease" fee on a phone that I paid cash money for as I personally like owning my phone, and was slammed into a contract for 2 years when I purchased a new phone that I paid cash money for. How can I fix this. As after I was slammed into the new contract I was also charged for them no longer offering the "plan" i was enrolled in. Then told if I wanted to change it I would then have to sign a new 2 year contract. I finally just left I felt like I was going to be forced into a bunch of contracts that I never wanted!

I've been billed 7.99 for over 8 years and no refund and told I need to set up auto pay and no other help

I too encountered this "ASL" charge when I had Sprint service in 2014-2016.
I was NOT informed of this charge. As a matter of fact when I was in the store I was approved for 5 lines! HMMM ok so this fee is for AT RISK credit. Then tell me why Sprint approved me for 5 lines!!! So I questioned Sprint about this and they said it was based in credit and gave me the spiel that I could have the waived with either 12 consecutive on time payments or enroll in auto-pay. First off no, you cannot force someone into auto-pay. I remember a all with a rep of Sprint where I was threatening to file with the FTC and they offered a measly $30 credit to my account which I DECLINED! I said no I am not accepting that because I do NOT accept the charges.
I apparently had an ASL of $300 which I never came close to and then when I researched I found out about all of this, I have ended Sprint's poor service and have since switched to Verizon for the past year almost. Much happier now and I do not have any bogus unjustified charges. I would like to look into this further and feel that Sprints unfair and sneaky business practice should be paid for. They should reimburse the customers they took advantage of.

I just asked sprint to start sending paper bills and when I got the paper statement I was shocked to see this charge. I have been with them since early 2015 and was never notified. When I called sprint to get this bogus charge removed, they REFUSED. I want my $7.99 for the past years REFUNDED. They will not even re run my credit to have it removed. Buyer beware! Once you get this charge it's locked in no matter how good you improve your credit. This is fraud. Sounds like a class action law suit to me!

My wife and I just switched to sprint 2/6/18. I went in the store and paid the extra 60.00 ( turned out once we were done it was actually 67.00.) We asked lots of questions and I have 3 long text transcripts that prove they are being deceptive. We were going to have them buy out our Verizon contract, but my mom has been waiting for her’s to be bought out since December. She also hasn’t received the $100 per line for those with credit union accounts, or her referral bonus. I don’t know anyone who has. The representative in the store was supposed to handle the entire switchover for us to avoid the issues that have happened with those who went through the internet, I showed him the referral link I got from my sister, and explained we had a credit union account and that as an UBER driver I am supposed to get a discount. He said that I couldn’t get the 30 % discount the first year. They also snubbed my veteran status and do not give a discount there either. Thank God I sold my iPhone 7+’’s for 475.00 each and paid off my bill myself! A couple days later after looking at this ridiculous paper/ contract the store rep promised us the flex plan with up to 5 lines of unlimited for $100 ( $70 if I get my discount, the call center said that I am entitled to the discount though). My first bill is 200.00!!! They are charging 2 bills in one and I’m not even on the plan we were promised. They said that my 858 credit score isn’t good enough and that we have a spending limit of 150.00 and be are being charged 7.99 for them to take it upon themselves to change my plan without even asking us. My phone lags and call s are dropped frequently. I want my 67.00 back since the store rep in Bristol, va on linden drive did nothing he said he was going to do...just sent us off with two Iphone 8’a that are supposedly buy one get one free. I spent hours trying to do the sprint/joinsprint nonsense. I am disabled and this makes it difficult for me to jump through all these hoops. They are intentionally pulling a bait and switch.

I had gotten a plan for four phones. 241.50 a month plus taxes. My bill end up being 311.00 a month. In which I thought was high. I was doing autopay for 4 years with them in total for services. My card expired and my bank sent me a new card. I forgot to change the card with them so they started charging me bills for 345.00 a month. I would get one email that says 400.00 then another that says 345.00 for that month. I call up and my bill was different on the phone pay service. I called sprint and ask them why my bill was changed and their excuse was that because auto pay has stop that I have to pay extra. So for almost a year I started paying the bill for 345.00 even though I was getting bills every month like 700.00 then 425.00 then 450.00 in my emails. Then one month came after paying my bill on time every month for fours years I was 2 weeks behind for 100.00. So they shut off my service. I called them up and they told me I had to pay or no service. When I called them back to pay the bill a woman was trying to get me to pay 243.00 when only a hundred was due. Then I told her that's not what is owed. Then she changed it to 160.00 then 150.00. I told her like a hundred times I'm only paying what is due. Finally it was paid for 105.00 even though the bill was only for 100.00. I forgot to say also when I first called it voice service was saying I only owed 35.00. Not to mention the phone they gave me was defective and they refused to replace it the same week I received the phone unless I drove to a Apple Store and paid to have them fix it. The speaker was a known defect in the phone that they knew about. Also when the guy came back for the room where the phone were the box was already opened. They never replaced it. So I had these phones for over a year. The person who sold me the phones said they were contracted for 1 year. She tried to tell me I still had another 5 months even though it has been way past the year we had them. So finally we went to another company and now we are trying to transfer are numbers and data. Something is wrong with Sprints port and won't aloud us to transfer the numbers. So Im back off to the store. That's where Im at with this now.


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