Prepaid cell phone provider TracFone has agreed to pay $40 million to settle complaints of deception regarding advertisements for "unlimited data" on the company's Straight Talk, Net10, Simple Mobile, and Telcel America brands. While plans costing around $45/month were advertised to include unlimited data, the Federal Trade Commission (FTC) alleges in a press release that "TracFone regularly either slowed down consumers’ data speeds – known as throttling – or cut off their data entirely when they used more than certain fixed amounts of data in a 30-day period." Even after TracFone started posting disclaimers in 2013, these disclaimers were "often not clear and conspicuous", according to the FTC.
This practice of throttling data is not uncommon - many companies describe their plans as unlimited with up to a set amount of "high speed" data. Of course, for users, this can mean that "unlimited" data plans are quite practically limited - throttling can reduce data access speeds to the point that using anything more than email can be a painful experience. (The PhonePlanChoices prepaid plan comparison tool only lists plans that include enough unthrottled data to cover the customer's monthly use unless the throttled data option is turned on.) But the TracFone advertisements were particularly deceptive because they hid or made no mention of the data limits.
Customers who bought a Straight Talk, Net10, Simple Mobile, or Telcel America "unlimited" plan before January 2015 should visit www.ftc.gov/prepaidphones to claim a refund. Users may be eligible even if their data service was not throttled or cut off.