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FTC Send Out Clear Warning To Carriers Who Offer ‘Unlimited’ Deals With $40 Million Fine To TracFone

January 28, 2015 - Written By John Anon


There have been a lot of things carriers have been doing right and wrong over the years. However, one of these ‘wrong’ things which have been attracted headlines recently, is the idea of ‘unlimited’ deals. In principle, this is exactly what all users do actually want, the ability to use as much data (or minutes, texts) as they like for one set price. However, carriers are reluctant (at least in the US) to really offer unlimited data as a truly ‘unlimited’ option. It is that word ‘unlimited’ which has now caught up with some of the carriers and most recently with TracFone.

Yesterday, the FTC issued a $40 million fine against TracFone, for what was considered to be effectively, false advertising. The carrier had slowed down customers data speeds, in spite of paying for what was being classed as an ‘unlimited’ deal. According to the details, TracFone was slowing customers down once their data hit between 1GB and 3GB. What is even worse, is that it seems when some customers were hitting 5GB, their speeds were almost completely shut off. The FTC announced that the $40 million fine will be sent back to customers in the form of a refund for those who experienced the data throttling

TracFone aside, this latest ruling seems to come as a clear warning to other carriers out there who also throttle customer data, while offering them an unlimited data plan. As Jessica Rich, Director of the FTC’s Bureau of Consumer Protection states in the FTC Press Release (source link below) “The issue here is simple: when you promise consumers ‘unlimited,’ that means unlimited“. The wording of the statement is clear, those who insist on selling plans which are coined ‘unlimited’ (or any variant which implies unlimited) has to offer those services to their customers. As such, this does seem like a precursor warning for the bigger carriers out there to make sure that their advertising is ‘truthful’. If you are a TracFone customer and had one of these unlimited plans (they went by a variety of different names) prior to January 2015, then you may be entitled to a refund and should click here to find out more details or to make a claim.