What you need to know
- The FTC sued AT&T for misleading customers with "unlimited" data plans.
- AT&T and the FTC settled for $60 million.
- Customers who had an AT&T "unlimited" plan will get a refund.
When AT&T sold "unlimited" data plans to customers from 2011 to 2014, it failed to properly inform them of the limitations and data caps, according to a lawsuit filed by the FTC and settled today. For its deceptive practice, AT&T will pay $60 million into a fund that will go to refund current and former customers who bought into the carrier's unlimited scheme.
Starting around 2011, the FTC alleges AT&T would begin to throttle users after they consumed as little as 2GB of data. Data speeds could sink so low that web browsing and video streaming over the network was impossible. The FTC says AT&T failed to inform as many as 3.5 million customers of the practice over that period. As part of the settlement arrangement, AT&T must make all throttling limitations prominent, not part of the fine print in the contract or a tiny link on its website.
AT&T had challenged the FTC's jurisdiction in this case and its authority over the marketing of wireless data services. The Ninth Circuit Court of Appeals sided with the FTC, giving the case the green light, and AT&T settled. On the promise of unlimited data, Andrew Smith, Director of the FTC's Bureau of Consumer Protection, said "Internet providers must tell people about any restrictions on the speed or amount of data promised," which he admits seems obvious.
The $60 million fund will be used to issue partial reimbursements to affected customers. The FTC says that customers do not need to take action. Former customers will get a check, and current customers will see the refund reflected as a credit on their bill. The FTC voted unanimously on this issue with Commissioner Rebecca Kelly Slaughter recusing herself.
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