Big Three Carriers Pay $10 Million To Settle Claims of False 'Unlimited' Advertising (arstechnica.com) 33
Jon Brodkin reports via Ars Technica: T-Mobile, Verizon, and AT&T will pay a combined $10.2 million in a settlement with US states that alleged the carriers falsely advertised wireless plans as "unlimited" and phones as "free." The deal was announced yesterday by New York Attorney General Letitia James. "A multistate investigation found that the companies made false claims in advertisements in New York and across the nation, including misrepresentations about 'unlimited' data plans that were in fact limited and had reduced quality and speed after a certain limit was reached by the user," the announcement said.
T-Mobile and Verizon agreed to pay $4.1 million each while AT&T agreed to pay a little over $2 million. The settlement includes AT&T subsidiary Cricket Wireless and Verizon subsidiary TracFone. The settlement involves 49 of the 50 US states (Florida did not participate) and the District of Columbia. The states' investigation found that the three major carriers "made several misleading claims in their advertising, including misrepresenting 'unlimited' data plans that were actually limited, offering 'free' phones that came at a cost, and making false promises about switching to different wireless carrier plans."
"AT&T, Verizon, and T-Mobile lied to millions of consumers, making false promises of free phones and 'unlimited' data plans that were simply untrue," James said. "Big companies are not excused from following the law and cannot trick consumers into paying for services they will never receive." The carriers denied any illegal conduct despite agreeing to the settlement. In addition to payments to each state, the carriers agreed to changes in their advertising practices. It's unclear whether consumers will get any refunds out of the settlement, however. These are the following changes the three carriers agreed upon, as highlighted by the NY attorney general's office:
- "Unlimited" mobile data plans can only be marketed if there are no limits on the quantity of data allowed during a billing cycle.
- Offers to pay for consumers to switch to a different wireless carrier must clearly disclose how much a consumer will be paid, how consumers will be paid, when consumers can expect payment, and any additional requirements consumers have to meet to get paid.
- Offers of "free" wireless devices or services must clearly state everything a consumer must do to receive the "free" devices or services.
- Offers to lease wireless devices must clearly state that the consumer will be entering into a lease agreement.
- All "savings" claims must have a reasonable basis. If a wireless carrier claims that consumers will save using its services compared to another wireless carrier, the claim must be based on similar goods or services or differences must be clearly explained to the consumer.
The advertising restrictions are to be in place for five years.
T-Mobile and Verizon agreed to pay $4.1 million each while AT&T agreed to pay a little over $2 million. The settlement includes AT&T subsidiary Cricket Wireless and Verizon subsidiary TracFone. The settlement involves 49 of the 50 US states (Florida did not participate) and the District of Columbia. The states' investigation found that the three major carriers "made several misleading claims in their advertising, including misrepresenting 'unlimited' data plans that were actually limited, offering 'free' phones that came at a cost, and making false promises about switching to different wireless carrier plans."
"AT&T, Verizon, and T-Mobile lied to millions of consumers, making false promises of free phones and 'unlimited' data plans that were simply untrue," James said. "Big companies are not excused from following the law and cannot trick consumers into paying for services they will never receive." The carriers denied any illegal conduct despite agreeing to the settlement. In addition to payments to each state, the carriers agreed to changes in their advertising practices. It's unclear whether consumers will get any refunds out of the settlement, however. These are the following changes the three carriers agreed upon, as highlighted by the NY attorney general's office:
- "Unlimited" mobile data plans can only be marketed if there are no limits on the quantity of data allowed during a billing cycle.
- Offers to pay for consumers to switch to a different wireless carrier must clearly disclose how much a consumer will be paid, how consumers will be paid, when consumers can expect payment, and any additional requirements consumers have to meet to get paid.
- Offers of "free" wireless devices or services must clearly state everything a consumer must do to receive the "free" devices or services.
- Offers to lease wireless devices must clearly state that the consumer will be entering into a lease agreement.
- All "savings" claims must have a reasonable basis. If a wireless carrier claims that consumers will save using its services compared to another wireless carrier, the claim must be based on similar goods or services or differences must be clearly explained to the consumer.
The advertising restrictions are to be in place for five years.
The consumer will get nothing (Score:2)
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And in five years, I fully expect them to start doing it again blatantly.
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Insane (Score:4, Interesting)
$10M is insanely small, rounding errors even, for these companies. And after five years, they are free to resume defrauding customers. This is ridiculous, and once again amounts to a cost of doing business that will be recouped in customer fees.
Re:Insane (Score:4, Funny)
This is ridiculous, and once again amounts to a cost of doing business that will be recouped in customer fees.
Don’t they realize that will just result in another class action lawsuit for about 0.12% of the gains? These companies never learn.
Rosanne (Score:3)
My favorite from Rosanne's standup act is, "The court awarded me alimony payments from my ex-husband. But what am I supposed to do with an extra $45/week?"
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My favorite from Rosanne's standup act is, "The court awarded me alimony payments from my ex-husband. But what am I supposed to do with an extra $45/week?"
At this point, to help pay for her leader's legal expenses.
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Re: Insane (Score:2)
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Yes they do. The consequence is to determine which party's politicians are on the take.
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The only significant part of this settlement is this:
In addition to payments to each state, the carriers agreed to changes in their advertising practices.
If the result is a change in advertising practices, that is a significant result.
Still lies (Score:2)
>""Unlimited" mobile data plans can only be marketed if there are no limits on the quantity of data allowed during a billing cycle."
But "unlimited" means without ANY limits. And limiting SPEED is also a limit (which they ALL do). So it is still a lie. The correct term might be "unlimited quantity" or "unlimited data."
>"Offers of "free" wireless devices or services must clearly state everything a consumer must do to receive the "free" devices or services."
By definition, "free" means at no cost OR ob
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The correct term ...
The correct term is "bonus". Thus, the common marketing blurb should be "buy one, get a bonus one".
Re: Still lies (Score:2)
small print (Score:2)
did these companies flat out lie or people didn't read the small print? in Canada theres a cell provider (freedom mobile) that advertises unlimited data but has *small print stating after a certain amount data is throttled.
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Reply to self:
>The correct term might be "unlimited quantity" or "unlimited data."
I missed a word, I meant "unlimited data amount"
The EU Has The Right Idea, The USA Does Not (Score:5, Interesting)
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The EU does fuck all. They PRETEND to impose huge penalties but in no way that is ever actually meaningful or impactful to profits.
Oh, look... AT&T pays less? (Score:2)
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The company that has been selling/giving American's call data and other personal data (cell GPS, etc.) to our government
Oh, my sweet summer child, they all do that or they don't get to be companies any more [wikipedia.org].
Profitable to lie in ads (Score:5, Interesting)
AT&T, Verizon, and T-Mobile lied to millions of consumers
So the fine worked out to less than a few bucks each, and over so many years these companies have gotten so much more profit from these customers the paltry $10M fine. And then of course none of those executives involved got any penalty.
The lesson: lying in ads is good for business and good for the execs, and they will do it again next time.
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Exactly. The real solution is to take corporate personhood all the way and start putting corporations in jail and executing them. Pick the worst offender, revoke their charter, nationalize the company, and send their entire board of directors and all executives involved in the decision to jail.
Still seems rather profitable (Score:2)
That'll show em' (Score:1)
Reports claim that they will also have their office donuts cut down to just glazed once a week and that coffee will now be self serve instead of catered. A harsh blow to an industry already reeling from profits.
"in place for five years" (Score:2)
Five years, why only five years? Does this mean that the companies will magically become responsible with their advertising if they are forced to do it for five years? I bet the marketing departments have already marked that date in their calendars and will be working on replacement advertising when that date passes. Well I guess the small amount of time matches the paltry fines they had to pay. Not even a rounding error in their books.
They actually agreed to pay an unlimited amount (Score:2)
but the fine print said they could cap it.
Not 10million each? (Score:1)
100million each seems more reasonable.