As if to put the final nail in the coffin of the years of customer complaints over unlimited data access across its various brands, the Federal Trade Commission has levied a substantial fine against Tracfone for its years of misleading advertising regarding unlimited data access, chiefly related to its StraightTalk Wireless brand as well as sibling brands. The fine of $40 million will go towards starting a refund program to issue refunds to customers that were previously affected by the throttling or had their data access/service cut off entirely.
Beginning in 2009 to mid-2013, TracFone advertised “unlimited data” plans for $45 per month across its various brands. Despite the promise of unlimited monthly data access, TracFone routinely throttled customers who surpassed 3GB of monthly data access, throttled others long before hitting 3GB of usage, and cut off others who either surpassed 5GB of data or decided to stream audio/video, going as far as deactivating accounts that did so despite having paid in advance for service.
Before Tracfone amended its data usage policies in mid-2013 to clearly spell out how much data could be used on a monthly basis, it was nearly impossible to determine what the monthly data limits were, if any existed. Tracfone’s previously vague data usage terms explicitly prohibited tethering to PCs and streaming of any kind, but did not specify limitations on data transfer in terms of a specific monthly data allotment before being throttled, or even alluding to having the capability to throttle customers before 2013. Jessica Rich, the director of the FTC’s Bureau of Consumer Protection issued the statement below:
“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.”
Tracfone has so far refused to issue a statement on the settlement, other than to acknowledge that a settlement was reached. Along with the fine, Tracfone will have to make its terms & conditions regarding data limits more prominent on its packaging and advertising going forward.
Beginning today, consumers who had a Straight Talk, Net10, Simple Mobile, or Telcel America unlimited plan before January 2015 can visit www.ftc.gov/prepaidphones to file a claim for a refund. Refunds will be paid to consumers whose data service was slowed or cut off. Consumers who had an unlimited plan but are unsure if their data service was slowed or cut off should still file a claim to find out if they are eligible for a refund.