The Federal Trade Commission today announced a formal complaint against AT&T alleging the carrier “misled” customers by charging for unlimited data and then throttling their data speeds up to 90 percent.
The FTC says AT&T didn’t adequately disclose to customers that unlimited plans would be slowed down after a certain amount of data was used during a billing cycle.
“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” FTC Chairwoman Edith Ramirez said in a statement. “The issue here is simple: ‘unlimited’ means unlimited.”
The FTC alleges that in 2011, AT&T started throttling unlimited data plan customers after they used “as little as 2 gigabytes of data.” The Commission says thus far AT&T has throttled at least 3.5 million unique customers, a total of more than 25 million times. The complaint alleges that AT&T collected Early Termination Fees (ETF) from customers who canceled their subscriptions after their unlimited data was throttled to 2G speeds.
The FTC is seeking to stop AT&T from “deceiving” customers about throttling unlimited data and is also looking for refunds for customers who were charged ETFs.
Wayne Watts, Senior Executive Vice President and General Counsel at AT&T, called the FTC’s allegations “baseless” and said they have nothing to do with AT&T’s 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,” Watts said in a statement. “We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented. In addition, this program has affected only about 3% of our customers, and before any customer is affected, they are also notified by text message.”
Ramirez said during a press conference that the majority of customers affected in the complaint were iPhone users.
AT&T recently reached a settlement in an FTC cramming lawsuit just as a new complaint against the carrier flares up. Earlier this month, AT&T agreed to pay $105 million, including $80 million in customer refunds, as part of a settlement deal over unauthorized premium charges on customer phone bills.