AT&T Fined $60 Million for Throttling ‘Unlimited Data’ Customers, Will Have to Issue Refunds

AT&T has agreed to pay $60 million to the Federal Trade Commission to settle a case in which it misled customers about its unlimited data plans.

An “unlimited data” plan should mean exactly that — unlimited data, with no caps whatsoever. However, AT&T throttled the speeds for its customers to 128kbps after they crossed a certain threshold. Depending on which plan one subscribed to, the limit was either 3GB or 5GB. The carrier started doing throttling its unlimited customers since 2011 which eventually led the FTC to sue AT&T in 2014. AT&T tried its best to drag the case as long as possible but eventually, a court ruling in the FTC’s favor left it helpless.

“AT&T promised unlimited data—without qualification—and failed to deliver on that promise,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “While it seems obvious, it bears repeating that Internet providers must tell people about any restrictions on the speed or amount of data promised.”

The $60 million that AT&T will pay to FTC will be used to provide partial refunds to affected customers who signed up for an unlimited data plan before 2011. Affected customers will automatically get a refund from AT&T and won’t have to file a claim for the same. The onus is on AT&T to identify all affected customers within 30 days from court ruling and give them the refund checks within 90 days. Any leftover money would then be handed over to FTC.

Additionally, the ruling also bars AT&T from marketing any plan purely based on its speed or data cap without highlighting any of its restrictions.

AT&T continues to throttle speeds for its customers on an unlimited data plan, though now it claims to do so only when there is network congestion.

[Via FTC]