The telecom industry has a new cop on its beat.
The Consumer Financial Protection Bureau sued Sprint on Wednesday for "cramming" consumers' phone bills with bogus third-party charges. The lawsuit demands that Sprint provide tens of millions of dollars in refunds to consumers.
It's the first time that CFPB, which is only about three years old, has gone after a phone company.
"Part of our mission here at the Consumer Bureau is to make sure that consumers are treated fairly in the financial marketplace," said Richard Cordray, the agency's director. "Sprint mistreated consumers egregiously by creating a billing system that invited illegal third-party charges and processed them in a highly irresponsible manner."
The Federal Communications Commission is also preparing to fine Sprint $105 million, according to agency officials, but hasn't taken formal action yet.
According to the CFPB lawsuit, Sprint placed unwanted charges on consumers' bills for about 10 years. Those charges, which were as much as $9.99 per month, were usually for "premium" services that delivered horoscopes, wallpapers, or ring tones, CFPB said. Consumers often signed up for the services accidentally by clicking on online ads and submitting their personal information.