Sprint is being fined $2.95 million for allegedly failing to tell customers with low credit scores that they would be charged an extra monthly fee.
Why Sprint is being fined
The Federal Trade Commission announced the charge against the nation’s fourth-largest mobile service provider is for violating the Fair Credit Reporting act — and that customers weren’t notified about the extra $7.99 ‘account spending limit’ until after it was too late to get out of their contract and find another carrier.
‘Sprint failed to give many consumers required information 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,’ Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement.
Sprint is supposed to notify customers when they are offered a different, more expensive plan when it’s based on their credit report.
According to the FTC, Sprint failed to provide ‘required information that would help consumers understand the information in their credit reports, and that may have alerted them to possible errors that caused them to receive less favorable terms of credit.’
Read more: How to raise your credit score
In some cases, this information alerts consumers to potential errors in their credit history. And according to the FTC, one in five consumers with credit report errors find issues that can be fixed.
The FTC says Sprint is required to send corrected notices to consumers who received incomplete ones in the past. Moving forward, Sprint will notify customers whose plans are impacted by their credit within five days of signing up for service — or by a date that allows them to opt out and avoid the additional charges.