FTC settlement returns $60 million to consumers affected by AT&T’s throttling practices

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Sometimes FTC cases affirm important legal principles in the courtroom. In other cases, we’re able to get money back for consumers injured by a company’s illegal conduct. The FTC’s action against AT&T for allegedly deceptive and unfair practices related to AT&T’s promises of “unlimited data” resulted in a key ruling last year about the FTC’s jurisdiction and will return $60 million to affected consumers.

In 2014 the FTC sued AT&T Mobility, LLC, for failing to adequately disclose to customers on unlimited data plans that if they used a certain amount of data in a billing cycle, AT&T would slow down or throttle their data speeds to the point that many everyday smartphone functions (for example, web browsing and video streaming) became nearly impossible. According to the complaint, despite its unequivocal promises of unlimited data, in 2011 AT&T began throttling data speeds for its “unlimited” customers who used a little as 2 gigabytes in a billing period.

In the course of that lawsuit, AT&T maintained that its status as a “common carrier” shielded it from the FTC’s action. Last year, a unanimous en banc decision of the United States Court of Appeals for the Ninth Circuit rejected AT&T’s argument and held that “the FTC may regulate common carriers’ non-common-carriage activities.” It was an important legal precedent about how established consumer protection principles apply in the digital marketplace, and paved the way for the FTC to get money back for consumers impacted by AT&T’s throttling practices.

The just-announced settlement prohibits AT&T from making any claim about the speed or amount of its mobile data – including describing it as “unlimited” – unless it clearly discloses in close proximity to the claim any material restriction on the speed or amount of data. For example, let’s say AT&T says on its site that a certain plan is unlimited. But what if the company wants to slow things down after consumers reach a certain data cap? Under the terms of the proposed order, AT&T must disclose those restrictions clearly and conspicuously and in close proximity to the claim. The order details how that must be done. For example, if AT&T makes the claim on a webpage, any restrictions on the amount or speed of mobile data must be “proximate to the triggering representation.” Using a hyperlink, pop-up, or interstitial won’t suffice.

The $60 million paid by AT&T will be used to provide partial refunds to current and former customers who signed up for unlimited plans, but were throttled by AT&T. The refund process will be automatic and no applications will be accepted. Current AT&T customers will get a credit on their bill and former customers will get checks for their portion of the settlement.

The take-away tip for businesses extends well beyond the wireless marketplace. If you advertise a service without qualification as unlimited, consumers have a right to expect you to deliver on that promise.
 


 

Comments

My mobile phone goes through ATT microcel for service in our area, wow provider kept checking why my phone had problems, lol thank you for finally letting me know why I had all the issues with my service.

Att started out good but became a lying cheating company who didn’t care about customers. I had AT&T for ten years. I had 3 lines of unlimited. What will I get? Ten dollars? I paid att in the thousands of dollars! I am so glad I switched. The FTC has done very little to help.

That’s great news as I have been a faithful AT & T customer since my first purchase of any cell phone, over 20 years ago.
I have constantly had to question charges which had been placed on my statement for no apparent reason! I also would receive text message updates letting me know that regardless of my unlimited plan my daughter & I had used up our GB for the month as a result they would be giving us 1 more at a charge of $15. The problem was it would only be about half way through our billing cycle therefore by the end of the month I received roughly a text such as mentioned above just about every other day, totaling usually around and extra $100/mo. It was ridiculous! I
Regardless of all of this I am disappointed to read that however again the punishment is being left up to the criminal to carry out in good faith! Seriously? It has been the same for so many supposed governmental suits regarding certain companies, corporations, banking institutions! I was harmed in numerous ways, and numerous times by JPMC, who we all know have had more lawsuits filed against them Probably than any one business has.....Yes, they lost as well, were ordered to always pay millions if not billions to the customers harmed, however like AT & T the compensation they were ordered to make was also left up to the accused, the perpetrators, the guilty to rectify with the customers involved. To find guilt from these entities for the committing of these violations, & down right crimes in some circumstances, yet allow them The responsibility to admit to each customer and then pay them compensation deserved for what they had done is just outrageous in my view! It would be equal to a criminal receiving a guiltY verdict in a child molestation case and for his punishment he’s told he now has to work at a daycare caring for children, given a slap on the wrist, and told to never do it again.
It’s either that being the case or another entity , such as whoever Is bringing the case forward supposedly on “behalf” of the harmed receives restitution made, the funds, yet for whatever reason never seem to make it to the consumer.
There is no help out there against these predators on society! They will tell you to file a complaint with the CFPA, to which I now respond been there done that! They are nothing but a venting system! They allow you to write out your complaint, they will get it to whom is being complained about, then will notify you of a response to your complaint, other than that, they do nothing else!
In fact before you even get the chance to go back to their website to read the response, they already have your complaint file “CLOSED”, regardless of what the response may be....I am convinced you could receive a response of an admission of murder in a written response yet your complaint would still state closed! In my view, the CFPB needs to change their name! It is false advertising, gives a false sense of security, they state they are their for a reason that is untrue, and they are duping the consumer! WHAT PROTECTION? Example please: can anyone please post if you have found protection from the above, please?

Christine MacKenzie

Another thing att does if not an unlimited customer with a low data and minutes plans.

30% of your incoming calls are TELEMARKETING, PHISHING, ETC TYPE CALLS

THIS IS WHILE ON DO NOT CALL REGISTRY B4 THE REGISYRY 50% OF CALLS FROM TELEMARKETING

EATS YOUR MINUTES AND DATA UP every month.
Unlimited plan calls reduced to about 15%

AT&T be falsely advertising just to do a credit check then lie and say they can't put internet or Wi-Fi in my area. Just liars and scammers.

You are so correct about at&t. I actually called them about this issue and was told that they do charge over a certain amount of gigabytes. Also told that dialing out remotely to a office with the same phone service that they charge for that as well. I'm trying to get my thousands of dollars they have overcharged me on my phone service through them. I was told to get my bill lowered that I need to purchase a wireless device through them and use a hot spot and I would save money on dialing back into my office from home.

I bought an ATT prepaid "go phone"; the phone stopped working and I wasn't getting calls or texts. I called and (of course) waiting over 30 minutes but they wouldn't refund anything. I'm never using ATT again for anything

How do I submit a claim because I had so so many issues and went back and forth for over 20 years dealing with AT&T. Please provide information on how to submit a claim.

The refund process will be automatic. Applications will not be accepted. Current AT&T customers will get a credit on their bill.  Former customers will get checks for their part of the settlement.

How will I know If my mailing address is correct if I am a former customer ?

In general, refund programs that use the mail update addresses with the US Postal Service National Change of Address Database before they start the mailing. Also, refund programs usually have a customer service phone number or email address that you can contact if you have questions.  The AT&T settlement was announced one week ago, on November 5. You can check with AT&T and the FTC for more information in the coming weeks.

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