As if it wasn’t already clear that the Federal Trade Commission doesn’t love it when carriers advertise throttled unlimited data as “unlimited”, a new FTC decision should do the trick.
The FTC has fined prepaid operator TracFone $40 million for throttling users that had signed up for unlimited data plans. The government agency says that TracFone typically throttled an unlimited users speeds once they had used between one and three gigabytes, and in some cases suspended data service at four or five gigabytes of usage. TracFone even completely cut off talk, text, and data services in some instances, says the FTC.
“The issue here is simple: When you promise consumers ‘unlimited’, that means unlimited,” said Jessica Rich, who works as director of the FTC’s Bureau of Consumer Protection. “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.”
The FTC says that TracFone began to disclose some of its throttling habits in regard to “unlimited” plans in September 2013, but that those disclosures typically were often unclear, with statements placed on the back of packages or in tiny print.
While most U.S. carriers have moved on from unlimited data plans, we do still see them from Sprint and T-Mobile. Also, AT&T and Verizon allow customers with grandfathered unlimited plans, so long as they pay full price for their devices. The FTC’s decision to fine TracFone for it’s throttling practices is exciting for anyone on an unlimited plan, and now it’ll be even more interesting to see how the FTC’s complaint against AT&T plays out.