TracFone To Refund $40 Million To Customers For Deceptive “Unlimited” Data Claims
TracFone users who paid for one of these unlimited plans before Jan. 2015 and had their data throttled or cut off can now go to ftc.gov/prepaidphones and file for a refund. Even those who are unsure of whether they may have experienced slowed-down data speeds may still apply for a refund to see if they are eligible.
According to the FTC complaint [PDF], TracFone “failed to disclose or adequately disclose its practice of enforcing fixed limits on the amount of mobile data service its customers could use in a thirty-day service period.”
The FTC says that for four years, most TracFone ads — and their products terms and conditions — failed to disclose that throttling may occur if customers surpassed a monthly data threshold. And even when the company began disclosing this information in Sept. 2013, the FTC alleges that it “tucked it away in small print” that was nowhere near the much more obvious statements about “unlimited” data.
This, alleges the complaint, is a violation of the FTC Act’s prohibition against deceptive marketing.
The proposed settlement [PDF] requires that TracFone remit the $40 million within five days of the entry of the order. The company may not seek the return of any of these funds.
The money paid by TracFone may be used to pay out settlements in private class action suits, like this one from 2013, filed over the company’s data throttling policy. However, none of that $40 million is to be used to cover other costs related to those settlements, including attorney fees, litigation expenses, court costs, or incentive payments to class representatives.
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