Technology

Mobile Provider TracFone to Pay $40M in Federal Settlement

The Federal Trade Commission building in Washington on Wednesday, Jan. 28, 2015. The nation's largest prepaid mobile provider, TracFone Wireless, will pay $40 million to settle government claims that it misled millions of smartphone customers with promises of unlimited data service. The FTC said that TracFone's advertising promised unlimited data, but the company then drastically slowed down consumers' data speeds, a practice known as throttling, when they had used a certain amount of data within a 30-day period. In some cases, the FTC said, the company cut off customers' data service when they ran over the limit. (AP Photo/Alex Brandon)
The Federal Trade Commission building in Washington on Wednesday, Jan. 28, 2015. The nation’s largest prepaid mobile provider, TracFone Wireless, will pay $40 million to settle government claims that it misled millions of smartphone customers with promises of unlimited data service. The FTC said that TracFone’s advertising promised unlimited data, but the company then drastically slowed down consumers’ data speeds, a practice known as throttling, when they had used a certain amount of data within a 30-day period. In some cases, the FTC said, the company cut off customers’ data service when they ran over the limit. (AP Photo/Alex Brandon)

JENNIFER C. KERR, Associated Press

WASHINGTON (AP) — The nation’s largest prepaid mobile provider, TracFone Wireless, will pay $40 million to settle government claims that it misled millions of smartphone customers with promises of unlimited data service.

The Federal Trade Commission said Wednesday that TracFone’s advertising promised unlimited data, but the company then drastically slowed down consumers’ data speeds — a practice known as throttling — when they had used a certain amount of data within a 30-day period. In some cases, the FTC said, the company cut off customers’ data service when they ran over the limit.

TracFone’s prepaid wireless service is sold under various brands, including Straight Talk, Net10, Simple Mobile and Telcel America.

Throttling will slow down the ability to open Web pages or stream video. According to the commission, TracFone generally throttled the data flow when a customer used about 1 gigabyte to 3 gigabytes. Data service was sometimes suspended at 4 gigabytes to 5 gigabytes, the FTC said.

“The issue here is simple: Unlimited means unlimited,” said Jessica Rich, director of the FTC’s consumer protection bureau, in a call with reporters. “This case is about false advertising.”

In a statement, TracFone said it worked with the commission to “reach an amicable settlement, and we have no further comment at this time.”

The prepaid monthly plans were sold at Walmart, Best Buy, Target and other retailers across the country as well as online.

Consumers who had a Straight Talk, Net10, Simple Mobile, or Telcel America unlimited plan before January 2015 can file a claim for a refund. Refunds will vary depending on several factors, including how long a consumer had the TracFone plan and how many consumers request refunds.

The FTC charges that TracFone has been throttling consumers or cutting unlimited service since 2009. The commission’s complaint says there was no technical reason for TracFone to limit the data plans, such as slowing speeds because of network congestion. Internal documents, the FTC says, suggest the throttling was done to “reduce the high costs associated” with providing unlimited data.

In September 2013, TracFone began making some disclosures about throttling unlimited plans, but they were usually not clear or the print was too small for a consumer to notice them, the FTC said.

The commission sued AT&T late last year over the same issue. AT&T has denied misleading customers over its unlimited data plans.

___

Online:

To file a claim: http://ftc.gov/prepaidphones

Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Tags
Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *


By submitting this form, you are consenting to receive marketing emails from: Washington Informer Newspaper, 3117 Martin Luther King Jr. Ave SE, Washington, DC, 20032, http://www.washingtoninformer.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Back to top button

My News Matters to me - Washington Informer Donations

Be a Part of The Washington Informer Legacy

A donation of your choice empowers our journalists to continue the work to better inform, educate and empower you through technology and resources that you use.

Click Here Today to Support Black Press and be a part of the Legacy!

Subscribe today for free and be the first to have news and information delivered directly to your inbox.


By submitting this form, you are consenting to receive marketing emails from: Washington Informer Newspaper, 3117 Martin Luther King Jr. Ave SE, Washington, DC, 20032, http://www.washingtoninformer.com. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact
Close

Adblock Detected

Please consider supporting us by disabling your ad blocker