Sprint settles Illinois lawsuit for $2.3M

Sprint will pay $2.3 million to the state of Illinois to help as many as 32,000 former customers secure unclaimed rebates. The carrier used rebate offers to attract new customers at various times between 2003 and 2011, but many of its customers never cashed their rebate checks.
The Illinois state treasurer reportedly learned from an audit that Sprint might owe money to more than 30,000 people. Funds that are not claimed within five years become state property in Illinois, so the state began legal proceedings against Sprint. Now the parties have settled out of court.
“There has been no finding of wrongdoing on the part of Sprint,” state treasurer Michael Frerichs said in a statement. He said the money is owed to citizens who simply failed to collect it for themselves.
“Rebates are used to encourage individuals to purchase a product or service,” Frerichs said. “Too many times, however, that hook becomes a dizzying maze that seems to shield a payment rather than fulfill a promise.”
Sprint said it was happy to resolve this issue, and values its customers in the Chicago area. The carrier’s Chicago network is now as fast as those of its larger rivals Verizon Wireless and AT&T, according to RootMetrics.
Rebates offered by Sprint after 2011 will not be eligible for this settlement, because unclaimed refunds do not become state property until five years have passed. People who think they may be entitled to a refund from Sprint can check the state’s unclaimed property database. Sprint will supply the state of Illinois with the names of the people entitled to unclaimed refunds, and the state will post the list.
A $2.3 million payment is not insignificant for Sprint, but it is much smaller than the company’s last major settlement. Last year, Sprint agreed to pay $131 million to settle a class action lawsuit brought by investors who claimed company management had fraudulently inflated Sprint’s stock price. The company is also facing a potential $300 million lawsuit in New York over claims that it failed to collect taxes from New York residents. The company has gone all the way to the Supreme Court in an effort to have that lawsuit dismissed.
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