FTC fines AT&T over 'unlimited' data misrepresentation, refunds to be issued

Today, the Federal Trade Commission announced that it will issue a $60 million fine against wireless network provider AT&T. The penalty is related to misleading advertising published by the company pertaining to its so-called “unlimited data” plans which actually weren’t so unlimited.

“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.”

Smith is referring to the practice of throttling — reducing data speeds for users who reach a certain data usage threshold during any one billing period. Although AT&T advertised its phone plans as coming with “unlimited data,” it failed to adequately disclose that that data could slow to a nearly-unusable crawl if users consumed too much of it.

According to the FTC, some customers saw throttling after just 2GB of data consumption.

Other wireless providers, such as T-Mobile, use deprioritization rather than throttling to nudge the small subset of users who consume massive amounts of data. In T-Mobile’s case, this deprioritization doesn’t kick in until you’ve used over 50GB in any one billing period, and even then it only kicks in during periods of network congestion.

Related: Here are the best AT&T plans

The FTC says that the $60 million fine against AT&T will be placed into a fund and divvied out to both current and former customers affected by the misleading language. Current customers will receive bill credits while former customers will receive mailed checks. If you are a current or former AT&T wireless customer, you don’t need to do anything: these partial refunds will be issued by the company automatically to those affected.

Going forward, the FTC says that “AT&T is prohibited from making any representation about the speed or amount of its mobile data, including that it is ‘unlimited,’ without disclosing any material restrictions on the speed or amount of data.” Furthermore, those disclosures “need to be prominent, not buried in fine print or hidden behind hyperlinks.”

You can read the full FTC announcement by clicking here.