TracFone's "Unlimited" Plan Really Wasn't, FTC Says

TracFone Wireless, the largest prepaid mobile service provider in the United States, has been ordered by the U.S. Federal Trade Commission to refund $40 million to customers whose “unlimited” service either was throttled or suspended.

The issue is the advertising of “unlimited” prepaid data service plans that include a provision for a reduction of speed after a certain threshold of usage. Such throttled access speed cannot be advertised that way, the FTC concluded.

Since 2009, TracFone’s ad campaigns touted  “unlimited talk, text, and data.” But TracFone drastically slowed or cut off consumers’ mobile data after they used more than certain fixed limits in a 30-day period

The FTC complaint says TracFone violated the FTC Act by advertising unlimited mobile data service while failing adequately to disclose that it imposed material restrictions on the quantity and speed of data for customers who used more than a fixed amount in a given service period.
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