CFPB Announces Enforcement Action Against Telecommunications Company for Alleged Unauthorized Third-Party Charges

CFPB Vendors Enforcement SDNY

On December 17, the CFPB filed a complaint in the Southern District of New York against a telephone company for allegedly charging its customers tens of millions of dollars in unauthorized third-party charges. According to the CFPB’s press release, for roughly a decade the company “crammed” consumers’ wireless bills with illegal charges by outsourcing payment processing for digital purchases – such as apps, games, and movies – to vendors known as “billing aggregators.” The CFPB alleges that the company failed to properly monitor the aggregators’ billing of customers as a payment processor for the third parties, and violated Dodd-Frank and the CFPA by (i) allowing third party vendors to attach illegitimate charges to consumers’ bills; (ii) billing customers for the unauthorized charges without their consent; (iii) failing to heed red flags showing that the system “was a breeding ground for unauthorized charges”; and (iv) failing to respond to consumer complaints. The complaint seeks refunds for consumers and penalties.