AT&T has agreed to pay $60 million to settle with the Federal Trade Commission for complaints that the wireless provider charged millions of smartphone customers for “unlimited” data plans while reducing their data speeds without informing them. The AT&T FTC unlimited mobile data settlement calls for the money to be deposited into a fund that the company will use to provide partial refunds to current and former customers who signed up for unlimited plans prior to 2011 and were throttled by AT&T.
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.
AT&T is now 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 as part of the settlement. The disclosures need to be prominent, not buried in fine print or hidden behind hyperlinks, the FTC said.
The FTC in 2014 had charged that AT&T failed to adequately disclose to its unlimited data plan customers that they would be “throttled” after reaching certain data caps each billing period. Users who were throttled then found it hard or impossible to use data-intensive applications such as web browsing and video streaming.
The FTC alleged that AT&T Mobility 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. In the first three years, more than 3.5 million customers were affected, according to the FTC complaint.
“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, in a prepared statement.“While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised.”