For A&T Mobility customers, there’s “unlimited” and then there’s “unlimited.” However, the Federal Trade Commission (FTC) says “Unlimited equals unlimited,” so the agency filed suit AT&T Mobility, LLC in late October 2014 for violations of the FTC Act.
According to the FTC, AT&T offered “unlimited” data plans to customers, charged them for the privilege, changed the terms of customers’ unlimited data contracts while they were still under contract, slowed the Internet speeds after some customers exceeded a certain amount of data, and failed to adequately inform customers of the deliberate slowdown when they signed or renewed their contracts.
The slowdown process, known as a “throttling,” commenced in 2011 and was allegedly used against 3.5 million “unique” customers 25 million times in total, slowing their service an average of 12 days each month. AT&T Mobility allegedly used throttling after certain customers used as little as 2 gigabytes of data in a billing period. Furthermore, the throttling managed to slow speeds by as much as 80% – 90%, making it difficult-to-nearly-impossible for customers to use mobile phone applications such as GPS navigation, web browsing and streaming video.
According to the FTC, “AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise. The issue here is simple: ‘unlimited’ means unlimited.” Accordingly, the company received thousands of complaints about the slow throttled speeds, with some customers referring to the company’s “unlimited data” plan as a bait-and-switch. Adding salt to the wound, AT&T typically charged hundreds of dollars in early termination fees when customers canceled their contracts due to the throttling program.
AT&T Mobility, LLC responded that: the allegations are baseless; the allegations have nothing to do with the substance of the company’s management program; the company has been completely transparent with customers since the very beginning, informing them through billing notices and a national press release before the program was implemented; affected customers were notified by text message; and only 3% of its customers were affected.
The suit, filed in U. S. District Court in San Francisco after unanimous approval by the FTC’s 5-member commission, seeks financial damages that may be used to reimburse affected AT&T customers.
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