Business Blog
FTC settlement returns $60 million to consumers affected by AT&T’s throttling practices
Sometimes FTC cases affirm important legal principles in the courtroom. In other cases, we’re able to get money back for consumers injured by a company’s illegal conduct. The FTC’s action against AT&T for allegedly deceptive and unfair practices related to AT&T’s promises of “unlimited data” resulted in a key ruling last year about the FTC’s jurisdiction and will return $60 million to affected consumers.
In 2014 the FTC sued AT&T Mobility, LLC, for failing to adequately disclose to customers on unlimited data plans that if they used a certain amount of data in a billing cycle, AT&T would slow down – or throttle – their data speeds to the point that many everyday smartphone functions (for example, web browsing and video streaming) became nearly impossible. According to the complaint, despite its unequivocal promises of unlimited data, in 2011 AT&T began throttling data speeds for its “unlimited” customers who used a little as 2 gigabytes in a billing period.
In the course of that lawsuit, AT&T maintained that its status as a “common carrier” shielded it from the FTC’s action. Last year, a unanimous en banc decision of the United States Court of Appeals for the Ninth Circuit rejected AT&T’s argument and held that “the FTC may regulate common carriers’ non-common-carriage activities.” It was an important legal precedent about how established consumer protection principles apply in the digital marketplace, and paved the way for the FTC to get money back for consumers impacted by AT&T’s throttling practices.
The just-announced settlement prohibits AT&T from making any claim about the speed or amount of its mobile data – including describing it as “unlimited” – unless it clearly discloses in close proximity to the claim any material restriction on the speed or amount of data. For example, let’s say AT&T says on its site that a certain plan is unlimited. But what if the company wants to slow things down after consumers reach a certain data cap? Under the terms of the proposed order, AT&T must disclose those restrictions clearly and conspicuously and in close proximity to the claim. The order details how that must be done. For example, if AT&T makes the claim on a webpage, any restrictions on the amount or speed of mobile data must be “proximate to the triggering representation.” Using a hyperlink, pop-up, or interstitial won’t suffice.
The $60 million paid by AT&T will be used to provide partial refunds to current and former customers who signed up for unlimited plans, but were throttled by AT&T. The refund process will be automatic and no applications will be accepted. Current AT&T customers will get a credit on their bill and former customers will get checks for their portion of the settlement.
The take-away tip for businesses extends well beyond the wireless marketplace. If you advertise a service without qualification as unlimited, consumers have a right to expect you to deliver on that promise.
In reply to How do I submit a claim by AnitaO
The refund process will be automatic. Applications will not be accepted. Current AT&T customers will get a credit on their bill. Former customers will get checks for their part of the settlement.
In reply to The refund process will be by FTC Staff
In reply to How will I know If my mailing by Evan Sheppard
In general, refund programs that use the mail update addresses with the US Postal Service National Change of Address Database before they start the mailing. Also, refund programs usually have a customer service phone number or email address that you can contact if you have questions. The AT&T settlement was announced one week ago, on November 5. You can check with AT&T and the FTC for more information in the coming weeks.
In reply to In general, refund programs by FTC Staff
In reply to The refund process will be by FTC Staff
In reply to What if I been with ATT for by Claudette Gill
In reply to I got a check for 12 whopping by DG
Read the Complaint for more information about how the $60 million deposited into the settlement fund will be distributed to people through bill credits and first class mail.
In reply to Read the Complaint for more by FTC Staff
In reply to The complaint states that 29M by MsC
In reply to I got a check for 12 whopping by DG
In reply to Been with At&T for over 20 by Cathy
In reply to Will customers like myself by Betty Emerson
Current customers will get a text message about the refund before it goes on your bill, and people who get a paper bill will get an insert in the bill that includes the refund.
In reply to Is there an approximate by Connie Emerson
The checks should be going out within the next 90 days.
In reply to The checks should be going by FTC Staff
In reply to I never received a credit for by Vicki Harris
In reply to I never received any money by Cassandra Cook
In reply to How will att send a check to by Guest
AT&T will send checks by first-class mail, postage prepaid, address correction service requested with forwarding and return postage guaranteed, to the former customer's current or last known address. Before it mails the checks, AT&T will update each address through the Postal Service's National Change of Address database.
In reply to AT&T will send checks by by FTC Staff
In reply to is the postal database work by AChmielewski
The Postal National Change of Address database contains information people submit when they change addresses. If you filled out a permanent change-of-address record when you moved and gave it to your local post office, your new address is in the National Change of Address database. If people don't cash or deposit the AT&T checks within 90 days, AT&T has to do an address trace. If they can find you with the address trace, they will send a new check.
AT&T is supposed to set up a phone number and email address so people can ask questions about the refunds.
In reply to What if you don’t want the by Jennifer evans
The settlement is designed to give current customers a bill credit.
In reply to The settlement is designed to by FTC Staff
In reply to Why can't current customers by Guest
The settlement is designed to give current customers a bill credit.
In reply to How do find out if you are by ReneH
Current customers who are going to get a refund should get a text message telling them a refund is coming. They should get the text message about 10 days before they get the refund on their bill. You should be able to see a general notice about refunds on your online account, on the first page after you log in to your account.
In reply to Current customers who are by FTC Staff
In reply to $12.86 refund. Quick math two by Bhanks
In reply to Hi FTC, do you have a number by Guest
The press release has more information about the settlement.