FTC: Throttled unlimited data not unlimited; agency reaches $40 million settlement with TracFone

FTC: Throttled unlimited data not unlimited; agency reaches $40 million settlement with TracFone
The FTC is cracking down on the use of the term "unlimited data," and this is what led TracFone Wireless to agree to a $40 million settlement with the agency. The company offers wireless service under various names like Straight Talk Wireless, Simple Mobile, Net10 Wireless, and Telcel America.

All of TracFone's operations offer unlimited talk, text and data plans. But some customers had their data speed throttled by 60% to 90% in the hopes that they would purchase a plan with a capped data allowance. According to the FTC, that's a big no-no. Some customers with unlimited service even had their data cut off completely until the next billing cycle. TracFone's ads as late as September 2013 made no mention of throttling and the mobile operator's terms and conditions regarding data services were too confusing for customers to figure out if their data speeds were being cut.

As a result of the settlement, TracFone must pay $40 million to customers who had their data connection throttled or cut off completely. AT&T is also under legal attack from the FTC and FCC for throttling unlimited customers. AT&T has filed to have the courts dismiss the FTC's legal action, saying that the latter has no legal jurisdiction in the matter

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source: DigitalTrends

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8 Comments

1. Fallen1

Posts: 288; Member since: Nov 14, 2014

I agree with this, I had so many complaints from customers while working at AT&T who had the grandfathered unlimited plan, but where throttled at 5GB to 85kbps

2. xondk

Posts: 1904; Member since: Mar 25, 2014

about dang time the US began beating down the phone/internet companies, the horror stories you hear very often from american's is just something I can't understand they were getting away with, wouldn't fly in most of europe.

3. Jason78

Posts: 281; Member since: Apr 10, 2013

Say goodbye to grandfathered unlimited plans.

4. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

Yes, but at least you know, and knowing is half the battle.

5. scsa852k

Posts: 331; Member since: Oct 16, 2012

Simple Mobile cut off their customers' data completely on their will and even some of their customer service reps said that.

6. Cha7520

Posts: 222; Member since: Oct 31, 2010

Sprint is next

9. tacarat

Posts: 854; Member since: Apr 22, 2013

I'd be happy to get my kids on unlimited 3G data over metered LTE. Or a 56k modem. They need to learn patience.

10. corporateJP

Posts: 2458; Member since: Nov 28, 2009

America Movil deserves this. Too bad each person's refund check will be only a couple bucks (if your name and address were ever on their files, that is)...

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