AP FILE – This May 14, 2014 file photo shows an AT&T logo on a store in Dedham, Mass. (AP Photo/Steven Senne, File)
AT&T has agreed to pay $60 million over allegations it charged smartphone customers for “unlimited” plans only to reduce their data speeds if they exceeded limits, the Federal Trade Commission announced Tuesday.
In a complaint filed in 2014, the FTC alleged the telecommunications giant failed to adequately disclose to its unlimited data plan customers that if they used a certain amount of data during their billing cycle, AT&T would reduce – or “throttle” – their data speed, sometimes to the point that web browsing and video streaming became nearly impossible to use.
“AT&T promised unlimited data—without qualification—and failed to deliver on that promise,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “While it seems obvious, it bears repeating that internet providers must tell people about any restrictions on the speed or amount of data promised.”
As part of the settlement, AT&T is prohibited from making representations about the speed or amount of mobile data, including that it is unlimited, without disclosing other restrictions.
The $60 million will go in part to provide refunds to both current and former AT&T customers who had originally signed up for unlimited plans prior to 2011. The policy has affected 3.5 million consumers as of October 2014, the FTC said.
Customers won’t be required to file for a claim. Current AT&T customers will automatically receive a credit to their bills; former customers will receive refund checks.