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By Gillian Burdett
Straight Talk and other Tracfone mobile services are the subject of an FTC lawsuit. Mike Mozart/flickr
The Federal Trade Commission (FTC) announced today that Tracfone has agreed to refund $40 million to Straight Talk and other unlimited data customers in settlement of an FTC complaint. According to the FTC, the prepaid mobile phone company deceived customers by advertising unlimited data services, but then slowed or cut off these services, a practice known as throttling, after users reached a set limit. Tracfone is the largest prepaid mobile provider in the U.S., selling services under the names Straight Talk, Net 10, Telcel America and Simple Mobile.
According to the FTC, since 2009 Tracfone has advertised unlimited talk, text and data services for a fixed 30-day price, yet would reduce data speeds from 60 to 90 percent after a customer used one to three gigabytes of data within the 30-day period. These reduced speeds made it difficult or impossible to use applications such as Netflix and YouTube. Reduced speeds made ordinary tasks such as checking email difficult. Consumers who used four to five gigabytes had data services completely suspended.
Consumers who purchased an unlimited plan from Straight Talk, Net 10, Telcel America or Simple Mobile between July 2009 and December 2014, and had their data services slowed or suspended, may claim a refund by visiting the FTC prepaid phones website. Those who purchased unlimited plans but are unsure if their data services were slowed or cut off should still file a claim to determine if they are eligible for a refund. Consumers who had more than one phone with unlimited data should file a separate claim for each phone.
While the settlement has not yet been approved by the court, the window for filing a claim is now open and will close at a yet to be specified date. Three factors will affect the size of payments to claimants: The number of eligible claimants, the time period in which services were slowed or suspended and how this affected the claimant’s service. Consumers may follow progress of the law suit through the Prepaid Phone Refund Facebook page.
Straight Talk and other Tracfone mobile services are the subject of an FTC lawsuit. Mike Mozart/flickr
The Federal Trade Commission (FTC) announced today that Tracfone has agreed to refund $40 million to Straight Talk and other unlimited data customers in settlement of an FTC complaint. According to the FTC, the prepaid mobile phone company deceived customers by advertising unlimited data services, but then slowed or cut off these services, a practice known as throttling, after users reached a set limit. Tracfone is the largest prepaid mobile provider in the U.S., selling services under the names Straight Talk, Net 10, Telcel America and Simple Mobile.
According to the FTC, since 2009 Tracfone has advertised unlimited talk, text and data services for a fixed 30-day price, yet would reduce data speeds from 60 to 90 percent after a customer used one to three gigabytes of data within the 30-day period. These reduced speeds made it difficult or impossible to use applications such as Netflix and YouTube. Reduced speeds made ordinary tasks such as checking email difficult. Consumers who used four to five gigabytes had data services completely suspended.
“The issue here is simple: when you promise consumers ‘unlimited,’ that means unlimited.” — Jessica Rich, director of the FTC’s Bureau of Consumer Protection
While the settlement has not yet been approved by the court, the window for filing a claim is now open and will close at a yet to be specified date. Three factors will affect the size of payments to claimants: The number of eligible claimants, the time period in which services were slowed or suspended and how this affected the claimant’s service. Consumers may follow progress of the law suit through the Prepaid Phone Refund Facebook page.
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