Tuesday, October 28, 2014

FTC Sues AT&T for Misleading Customers

The FTC (U.S. Federal Trade Commission) announced today that it is suing AT&T for misleading millions of their smartphone customers. Apparently, customers who have paid for unlimited data plans are being throttled, even though this was NOT disclosed in the information AT&T provided to them. Reports show that in some cases, speeds have dropped almost 90%.

The charges filed in the lawsuit were put forth with the assistance of the FCC, which technically has jurisdiction over the mobile provider. The FTC states that the company had performed a "deceptive failure" to disclose its mobile throttling plan. An additional comment from FTC chairwoman Edith Ramirez sums up their view on the issue: "Unlimited means unlimited. AT&T promised its customers 'unlimited' data, and in many instances, it has failed to deliver on that promise."

It was found that AT&T began throttling data in 2011 after customers used 2GB of data - an amount most of us can go through quite quickly. In fact, the FTC claims that about 3.5 million individual customers may have been throttled more than two-dozen times.

After learning of the news, AT&T general counsel Wayne Watts made the following comments:

“The FTC’s allegations are baseless and have nothing to do with the substance of our network management program. It’s baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts. It's the second time this month the company has been bitten by the federal government. Earlier in October, AT&T was forced to pay $80 million back to consumers after it billed customers for unauthorized third-party charges. The FTC claimed the company billed for "hundreds of millions of dollars in charges originated by other companies," usually in amounts of about $10, for subscriptions to ringtones and other text message-based content. AT&T was said to have kept at least 35 percent of the charges it billed to its customers in a practice known as "mobile cramming."