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David H. Lipman

AT&T to Pay $60 Million to Resolve FTC Allegations ...

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AT&T to Pay $60 Million to Resolve FTC Allegations It Misled Consumers with ‘Unlimited Data’ Promises

"AT&T Mobility, LLC, will pay $60 million to settle litigation with the Federal Trade Commission over allegations that the wireless provider misled millions of its smartphone customers by charging them for “unlimited” data plans while reducing their data speeds.

In a complaint filed in 2014, the FTC alleged that AT&T failed to adequately disclose to its unlimited data plan customers that, if they reach a certain amount of data use in a given billing cycle, AT&T would reduce—or “throttle”—their data speeds to the point that many common mobile phone applications, such as web browsing and video streaming, became difficult or nearly impossible to use.

“AT&T promised unlimited data—without qualification—and failed to deliver on that promise,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised.”

The FTC alleged that, despite AT&T’s unequivocal promises of unlimited data, it began throttling data speeds in 2011 for its unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. AT&T’s alleged practices affected more than 3.5 million customers as of October 2014, according to the FTC complaint.

After AT&T challenged whether the FTC had jurisdiction to bring the case, the Ninth Circuit U.S. Court of Appeals in 2018 ruled that the FTC did have jurisdiction and authority to challenge the company’s marketing of mobile data services, allowing the Commission’s case to proceed.

As part of the settlement, AT&T is prohibited from making any representation about the speed or amount of its mobile data, including that it is “unlimited,” without disclosing any material restrictions on the speed or amount of data. The disclosures need to be prominent, not buried in fine print or hidden behind hyperlinks. For example, if an AT&T website advertises a data plan as unlimited, but AT&T may slow speeds after consumers reach a certain data cap, AT&T must prominently and clearly disclose those restrictions.

The $60 million paid by AT&T as part of the settlement will be deposited into a fund that the company will use to provide partial refunds to both current and former customers who had originally signed up for unlimited plans prior to 2011 but were throttled by AT&T. Affected consumers will not be required to submit a claim for the refunds. Current AT&T customers will automatically receive a credit to their bills while former customers will receive checks for the refund amount they are owed."

 

FYI:   https://violationtracker.goodjobsfirst.org/parent/at-and-t

"Penalty total since 2000:  $1,321,619,366
Number of records:   261"

 

 

Edited by David H. Lipman

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Yep, and $60 million is a drop in the bucket with little more than a slap on the write fine for many of these huge hi tech companies.

I have unlimited but the Agent that helped me set up the account was clear that after 22GB per user (on a family plan) they would throttle the speed.

 

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I have AT&T DSL and I recently upgraded to a faster speed (double my previous speed) as they now offer it in my area (I wish they'd have contacted me when it first became available like they promised to years ago when I originally asked about faster speed :P) and one of the things I made absolutely certain of with the agent before approving the upgrade was that there would be absolutely no data caps whatsoever and she assured me there would be none (I'm on a business account since I work from home and one of the benefits is no caps, plus priority support) so for around $60 a month I now have an over 2MB (that's Megabytes) per second connection (around 13.5 megabits which is the measurement they advertise internet speeds in typically) with absolutely no limits.  It's just about double my previous connection speed and it couldn't have come at a better time since not long ago my family was kind enough to provide me with a new 1440p 144Hz IPS monitor, so now I can stream full 1440p res video rather than 1080p because I've got the bandwidth to handle it, and boy does it look pretty :).

I don't really have any experience with AT&T wireless as I don't use an AT&T cell phone, but their DSL division has been really good to me over the years and their services is as consistent as the sunrise and virtually never goes down (even when the power goes out, which is pretty impressive IMO, especially since as far as I know, their lines are hanging from the same poles as the power company's as we're still on copper here; no fiber for me sadly :().  I prefer it to cable if only because with cable you have to share bandwidth with your neighbors/other homes in your area which really hurts speeds during peak hours.  I like to know that no matter what, my connection speed is going to be consistent, and I monitor it constantly via a handy sidebar gadget so I always know what speed I'm getting.

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Yeah, but where does that money go? Who uses it, why not return some of that money to the customers.

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1 hour ago, Firefox said:

Yeah, but where does that money go? Who uses it, why not return some of that money to the customers.

Because often due to the amount of taxes, legal fees, etc. and so many people involved (in the case of most class action lawsuits) that it's pennies on the dollar. In some cases less than $5 per person

 

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6 hours ago, Firefox said:

Yeah, but where does that money go? Who uses it, why not return some of that money to the customers.

Unless I misread it, it's all going to the customers:

The $60 million paid by AT&T as part of the settlement will be deposited into a fund that the company will use to provide partial refunds to both current and former customers who had originally signed up for unlimited plans prior to 2011 but were throttled by AT&T. Affected consumers will not be required to submit a claim for the refunds. Current AT&T customers will automatically receive a credit to their bills while former customers will receive checks for the refund amount they are owed."

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