TracFone will pay $40 million to settle unlimited data beef with the FTC
Consumers who have previously signed up for pre-paid wireless plans advertised with unlimited data from TracFone now have the right to claim a refund, as the company has agreed to a $40 million settlement over charges that it throttled or disconnected customers who used too much data.
The Federal Trade Commission alleges that while TracFone did not impose consistent limitations, the company generally began to throttle access after 3 gigabytes and disconnected customers who used more than 4 gigabytes in a month. This was not done for technical reasons, the agency said, as internal TracFone documents showed it was an effort to "reduce the high costs associated" with providing unlimited data.
"The issue here is simple: when you promise consumers 'unlimited', that means unlimited," Bureau of Consumer Protection director Jessica Rich said in a statement. "This settlement means that Straight Talk, Net10, Simple Mobile, and Telcel America customers will be able to get money back from the company for services the company promised but didn't deliver."
Going forward, TracFone will be required to "clearly and conspicuously disclose" limits to speed or throughput in its advertising.
The FTC is also after industry leader AT&T for similar practices. A lawsuit filed in October of last year accuses the carrier of "severe" throttling that may have affected as many as 3.5 million customers.
The Federal Trade Commission alleges that while TracFone did not impose consistent limitations, the company generally began to throttle access after 3 gigabytes and disconnected customers who used more than 4 gigabytes in a month. This was not done for technical reasons, the agency said, as internal TracFone documents showed it was an effort to "reduce the high costs associated" with providing unlimited data.
"The issue here is simple: when you promise consumers 'unlimited', that means unlimited," Bureau of Consumer Protection director Jessica Rich said in a statement. "This settlement means that Straight Talk, Net10, Simple Mobile, and Telcel America customers will be able to get money back from the company for services the company promised but didn't deliver."
Going forward, TracFone will be required to "clearly and conspicuously disclose" limits to speed or throughput in its advertising.
The FTC is also after industry leader AT&T for similar practices. A lawsuit filed in October of last year accuses the carrier of "severe" throttling that may have affected as many as 3.5 million customers.
Comments
Good for consumer rights, but $40 million is chump change to Carlos Slim.
I'm looking forward to the lawyers sending me (postage = $1.10) a packet and then I can generate some more paperwork and get my .01 cent refund back.
Thank you!
What about Straight Talk? They do the SAME THING!!! Advertise Unlimited Voice, Text and Data, but then I hear in blogs that it's around a 2 gig limit and they'll have no problem booting you off their service. I was using them and it wasn't a problem for me. I liked the $45 a month price, but if you're going to advertising Unlimited and there's really a LIMIT. Not only a Limit they don't tell you about, buy you risk getting booted from their service going over,..... I wouldn't have had a problem if they Advertised Unlimited Voice, text and 2 Gig's of Data!!! I would have still used the service.
It's the same crap with Company's with their CAPS from Comcast or AT&T, whoever. Is it 25 Gig's, 250 Gig's, 300 Gig;s?!?! Unlimited?!?! They are never clear and it seems to always be changing from one day to the next.
If a company wants to sell unlimited service then make it unlimited. If they want to impose a cap then advertise it as such. A restaurant can't legally sell all you can eat and then surprise customers with "sorry, but you are finished because you ate two pounds of food."
Reminds me of Verizon's FiOS users that Verizon complains have excessive usage on unlimited accounts.
What about Straight Talk? They do the SAME THING!!! Advertise Unlimited Voice, Text and Data, but then I hear in blogs that it's around a 2 gig limit and they'll have no problem booting you off their service. I was using them and it wasn't a problem for me. I liked the $45 a month price, but if you're going to advertising Unlimited and there's really a LIMIT. Not only a Limit they don't tell you about, buy you risk getting booted from their service going over,..... I wouldn't have had a problem if they Advertised Unlimited Voice, text and 2 Gig's of Data!!! I would have still used the service.
Did you even read the article? Apparently not.
"This settlement means that Straight Talk, Net10, Simple Mobile, and Telcel America customers will be able to get money back from the company for services the company promised but didn't deliver."
Straight Talk (and the others mentioned above) are all brands of TracFone.