Wireless Industry Fined Yet Again For Selling Very Limited ‘Unlimited’ Data Plans


from the words-are-but-wind dept

For decades now, U.S. wireless carriers have sold consumers “unlimited data” plans that actually have all manner of sometimes hidden throttling, caps, and restrictions. And every few years a regulator comes out with a wrist slap against wireless carriers for misleading consumers, for whatever good it does.

Back in 2007, for example, then NY AG Andrew Cuomo fined Verizon a tiny $150,000 for selling “unlimited” plans that were very limited (Verizon kept doing it anyway). In 2019, the FTC fined AT&T $60 million for selling “unlimited” plans that were very limited, then repeatedly lying to consumers about it (impacted consumers saw refunds of around $22 each).

Similar state and federal fines and lawsuits have also been levied against these companies prepaid wireless brands over the years. This never-ending game of patty cake over the term “unlimited” also happens in Canada fairly routinely.

Last week, NY AG Leticia James that T-Mobile, Verizon, and AT&T will pay a combined $10.2 million settlement for — you guessed it — selling “unlimited” plans that were very limited:

“A multistate investigation found that the companies made false claims in advertisements in New York and across the nation, including misrepresentations about “unlimited” data plans that were in fact limited and had reduced quality and speed after a certain limit was reached by the user. The companies will pay $520,000 to New York and are required to change their advertising to ensure that wireless service plans are accurately and fairly explained.”

Will wireless carriers actually change their marketing tactics? Probably not! Will consumers see refunds? Probably not! Do the carriers have to admit any legal wrongdoing? Nope! Are the penalties stiff enough to deter future abuses? No way.

In this case, the settlement — which involved every U.S. state but DeSantistan Florida — was built on an investigation that started nine years ago but was effectively slow walked by industry lawyers. The investigation found that not only do wireless carriers (and their prepaid subsidiaries) routinely sell “unlimited” data plans with limits, but they also promote “free” phones that aren’t free.

If telecom industry history is any indication, the $10.2 million in fines will likely be watered down after another year or two of legal wrangling. And you’ll probably be right back here a few years from now reading about another wrist slap levied against an industry seemingly obsessed with abusing consumer trust — and the dictionary definition of very basic terminology.

Filed Under: broadband, caps, consumer protection, leticia james, NY AG, regulation, unlimited, wireless

Companies: at&t, t-mobile, verizon

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