AT&T Fined $60 Million, Misleading Customers With Unlimited Plans

An AT&T store is seen in Springfield Virginia on Oct. 23 2014

"AT&T's bait-and-switch scam is a good window into the many harms that result from dominant companies operating without the discipline of meaningful competition", said FTC Commissioner Rohit Chopra said in a statement regarding the settlement.

The Federal Trade Commission announced Tuesday it has reached a $60 million settlement with AT&T for allegedly deceptive and unfair practices related to the company's promises of "unlimited data".

The FTC sued AT&T in 2014 for not clearly letting customers know that if they used up a certain amount of data, AT&T would slow their speeds so much that web browsing was nearly impossible.

The No. 2 carrier acknowledged the settlement in a comment published by Reuters.

The $60 million will be deposited into a fund to provide partial refunds to both current and former customers who had signed up for unlimited plans prior to 2011 but had their data speeds reduced, or "throttled" by AT&T when their usage went past a certain threshold.

Going forward, the FTC says that "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". Any such disclosures will need to be prominently placed, not hidden in fine print or behind hyperlinks, according to the settlement.

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There's no need to fill anything out or submit a claim; if you're now an AT&T customer, you'll get a bill credit, and if you're a former customer you should get a check in the mail.

"AT&T promised unlimited data - without qualification - and failed to deliver on that promise", Andrew Smith, director of the FTC's Bureau of Consumer Protection, said in a statement.

AT&T tried to fend off the FTC in court for years, saying the agency didn't have jurisdiction over the case. The company is also barred from marketing plans off of their suggested speed or amount of data without disclosing any restrictions those plans may have.

Throttling has been an issue within the telecom industry as smartphones have become ubiquitous and data usage has surged. Only those who paid for unlimited data plans before 2011 are eligible as that was the year the company initiated its data throttling policy. The carrier stopped offering unlimited data in 2010 and sold tiered plans instead, which capped data and charged huge penalties for overages.

However, in 2018 Verizon allegedly throttled a Northern California fire department's data as its firefighters battled the largest wildfire in state history.

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