Mobile provider TracFone to pay $40M in federal settlement

http://apnews.myway.com/article/20150128/us--ftc-tracfone_settlement-506615ba00.html

Jan 28, 2:57 PM (ET)
By JENNIFER C. KERR

The nation's largest prepaid mobile provider, TracFone Wireless, will pay $40 million to settle government claims that it misled millions of smartphone customers with promises of unlimited data service.

The Federal Trade Commission said Wednesday that TracFone's advertising promised unlimited data, but the company then drastically slowed down consumers' data speeds — a practice known as throttling — when they had used a certain amount of data within a 30-day period. In some cases, the FTC said, the company cut off customers' data service when they ran over the limit.

TracFone's prepaid wireless service is sold under various brands, including Straight Talk, Net10, Simple Mobile and Telcel America.

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Consumers who had a Straight Talk, Net10, Simple Mobile, or Telcel America unlimited plan before January 2015 can file a claim for a refund. Refunds will vary depending on several factors, including how long a consumer had the TracFone plan and how many consumers request refunds.

The FTC charges that TracFone has been throttling consumers or cutting unlimited service since 2009. The commission's complaint says there was no technical reason for TracFone to limit the data plans, such as slowing speeds because of network congestion. Internal documents, the FTC says, suggest the throttling was done to "reduce the high costs associated" with proving unlimited data.

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