Jan 28 AT 3:23 PM Alex Wagner 4 Comments

FTC fines TracFone $40 million because it believes that throttled unlimited data isn’t really unlimited

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After taking AT&T to task for throttling unlimited data plans in late 2014, the Federal Trade Commission is now going after prepaid provider TracFone.

The FTC has fined TracFone $40 million for throttling unlimited data plans. The agency says that TracFone has been advertising its unlimited plans since 2009, but has throttled many users after one to three gigabytes of usage and suspended data service after four to five gigabytes of usage. While TracFone began to disclose its throttling practices in September 2013, the FTC says that those disclosures weren’t clear enough because they were often printed on the back of boxes or in small print, where consumers were unlikely to find them.

“The issue here is simple: When you promise consumers ‘unlimited’, that means unlimited. 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.”

This news is certainly exciting for anyone that’s on an unlimited plan, especially those folks that are on grandfathered offerings from AT&T and Verizon. And while we’re still waiting to see how the FTC’s complaint against AT&T will play out, today’s news makes that battle even more interesting than it already was.

Via: Re/code

Source: FTC

Editorial Director of News and Content for PhoneDog Media. Fluent in whisk(e)y, video games and phones. Can be followed on Twitter at @alw.

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  • Dirty Budha

    Throttling “unlimited data plans” IS wrong.

    “… the FTC says that those disclosures weren’t clear enough because they were often printed on the back of boxes or in small print, where consumers were unlikely to find them.”
    This is all too common. I’ve worked on advertisments for another company like these and one thing that was made clear was that the small print had to legally be readable…on a billboard…from a good distance…but as amall as possible.

  • mat

    How have they not gone after Verizon? I have a weird feeling that they won’t. Just because you call a lie “Marketing” or “Advertising” Stop being such weird liars, and give us what we pay for. Unlimited means that, or at least it used to, now it means you better get our your reading glasses and find the fine print.

  • jeffridge

    unlimited my ass cant download no apps. or videos o music for 48.00 a month breach of contract ill be seeking me a lawyer for a lawsuit 20 mins. to watch a three min video

    • jake

      Sure you will. It isn’t breach of contract if you choose not to read the TOS. It’s shady business practice at best.