Big Three Carriers Pay $10 Million To Settle Claims of False 'Unlimited' Advertising

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.

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