Sprint Gouges Business Customer For Over $30,000 In Inflated Fees

Allen Harkleroad of GMP Services writes, “A warning to all Sprint corporate customers that have dedicated access (T1’s, etc.) if you are out of contract Sprint may be gouging you and claiming outrageously high local loop charges as the cause.

Harkleroad was told four times by Sprint reps that they had to pay over $950 per line in local loop costs—but it turns out local company Frontier Communications says they only get around $250 per connection from Sprint. So where does that other $700 go? Probably to help pay for that dead weight called Nextel. If you’re a Sprint business customer you should know that you’re possibly being gouged—and, if you were told the same thing as Harkleroad, lied to about the reason.

Harkleroad claims the amount he was overcharged comes up to $38,000 over two years, but we can’t come up with that amount using our advanced math skills: 2 lines per month with overcharges of $700 for each one is $1400 per month, times 24 months is $33,600. It’s still a huge amount, especially for a small company.

After he posted his story online, Harkleroad was contacted by Sprint over the weekend:

Update March 16, 2008 12:42pm. I got a call yesterday (Saturday 3/15) from Linda Moreno of Sprint’s Executive and Regulatory Services. We had a pleasant and informative chat and was advised that she/they would get to the bottom of the issue. I agreed to give her and Sprint till Wednesday (March 19th) to resolve the issue to my satisfaction.

Sprint responded to this post with the following statement, “We are continuing discussions with Mr. Harkleroad and will work to address his concerns. But, because of Federal privacy laws and our company’s privacy policies, Sprint will not publicly comment on specific customer’s complaints, this includes those made by Mr. Harkleroad.

It’s important to note that unlike our wireless offerings, which have national price plans in place, the prices for our wireline telecommunications and IP services vary depending on the bandwidth requirements between Sprint and the individual customer as well as the customer’s physical location and proximity to Sprint’s network facilities. The prices in our contracts for IP connections are negotiated, mutually agreed to and reflect an extremely competitive telecommunications market.”

“Screwed by Sprint to the tune of $38,000.00 “ [DesignerToday]
(Photo: Getty)

Comments

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  1. ncboxer says:

    Does Consumerist get a percentage of the total recovered for helping out by posting his story?

  2. jaydez says:

    Is Sprint taking gouging customers seriously though?

  3. dualityshift says:

    We all know it’s those corporations’ fault. If they weren’t too busy gouging their customers, their bean counters may have caught SPRINT. :D

  4. sleze69 says:

    Mail Fraud?

  5. bradanomics says:

    What’s the difference between a business making money off of a customer and gouging?

  6. yikz says:

    $250 sounds reasonable for the monthly recurring charge on one end of a T1. T1’s have 2 ends. Who’s paying for the other end? Sprint is going to pass that on to the customer, especially if they’re buying local access from Frontier. Also, T1’s have mileage charges. If it’s frame relay, then they have some frame relay fees.
    As for rates, rates are quoted in State Tariffs. You sign a 5 year contract, you get a good rate. When that contract ends, the rates go up. This guy can’t check his bill more than once every 2 years, I don’t sympathize with is plight. He should learn to be more diligent.
    Telcos all operate the same way because they’re forced to follow rules that are put in place by the Public Utilities Commission in each state.

  7. kbarrett says:

    The difference is in not telling lies to the buyer.

    If Sprint had just simply said “We are charging you more because we want to be paid more”, I would not have had a problem with it.

    When they say “We are charging you more because of ( insert blatant lie here )”, they are committing fraud.

  8. brittedward says:

    Bandwidth is frought with price gouging becasue most businesses don’t know any better. I have been selling bandwidth for evr since T1s used to cost thousands of dollars. Now, unless you’re in a remote location, most companies don’t pay more than $400-$500 for the loop and port.

    Shoot me an email if you want to get away from Sprint.
    brittedward@gmail.com

  9. brittedward says:

    @yikz:

    If by two ends you mean loop and port, then you are correct. The loop is the milage charge and that comes from the LEC.

  10. rekoil says:

    @yikz: If you’re talking about just the T1 loop, there’s one fee for the entire circuit, not one for “each end”. That’s the “loop tariff”, which what you’d pay if you ordered, say, a T1 to go between two of your offices, not from your office to Sprint’s IP backbone for internet access.

    What you’re probably thinking of is the “port charge”, which is what Sprint is charging for internet access, which would be the same fee if you have a T1 going across the city or the next rack over.

  11. chiieddy says:

    The extras might be the costs of various taxes and fees he was overcharged. For example, 5% sales tax on $950 is $47.50, while on $250 is only $12.50. This accounts for an average of $35 at that rate (which may be more or less where he’s from). That’s an addition $1680 or more over 2 years.

    Up that to 8% sale tax and you’re looking at $2688 over two years. Still less than reported, but closer.

  12. Chiieddy, that overcharge is the per month not per year. Overcharged about $1,668.00 per month for the service.

  13. chiieddy says:

    @Big Flicker: No, it’s over 2 years.

    Harkleroad claims the amount he was overcharged comes up to $38,000 over two years, but we can’t come up with that amount using our advanced math skills: 2 lines per month with overcharges of $700 for each one is $1400 per month, times 24 months is $33,600.

    The charge per month was $950 per line, for two lines or $1900/mo. He ought to have been charged $250 per line for two lines for $500/mo. The overcharge per month is $1400 * 24 months = $33,600

    Now… if you take the sales tax numbers I provided. Sales tax on $1400 at 5% = $70 and on 8% = $112.

    70 * 24 = $1680
    112 * 24 = $2688

    Which are the numbers I gave above.

  14. cioonthego says:

    I threw Sprint out of our company back in 1998 over the same issues. Interesting to see they are still up to their old games. Only after they lost our business did they ‘review’ the account and adjust about $25,000 in overcharges, in an effort to retain the business. Too little, too late. This is not an error, this is their SOP until they get caught. Qwest and One Communications do the same thing, so watch out.

  15. @cioonthego:

    Would you check your consumerist.com site messaging, I sent you a message. thanks!

  16. The article has been updated (the outlink) evidently Sprint has a publicly access wholesale pricing tool, Sprint just got owned by their own tool. PDF and XLS versions of the pricing is there for download. Gouged about 1545.00 a month according to Sprints actual pricing for DS3 service from Atlanta to Statesboro (note the pricing output shows the annual costs, you’ll need to do some math .

    Originating costs: $1,992.00/yr
    Termination costs: $8,397.00/yr

    total annual cost $10,389.00 (plus taxes)

    $865.75 (plus applicable taxes) a month rather then $2,400.00+ a month, net difference of a bit over $1,545.00 a month (gouged this much).

    Someone at Sprint has some splainin to do….

  17. nevesis says:

    Who is this Allen guy?

    Allen also opened his own million dollar homepage ([www.fivemilliondots.com]) where he has photos ([www.fivemilliondots.com]) of him and his bill collection notices.

    He likes to spam Reddit ([reddit.com]) with links to his flickabooger blog.

    Oh and… he’s done this *sucks.com thing before. ([www.citmedialaw.org]) Apparently Lowe’s offered him a settlement to go away.

  18. So what does him raising funds to help pay for medical bills have to do with doing something about defective products or getting result for being overcharged. I imagine if you were in the same shoes with similar companies you would try to draw attention to it as well. So what if he uses sucks.com to battle huge companies, evidently everything else he tried failed. LOL, you probably work for one of those companies.