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FTC: Unlimited Data With Throttling is Not Truly Unlimited

Today, news is breaking from the FTC’s order for TracFone, a prepaid service provider, to pay $40 million for slowing the speeds of customers who have paid for ‘unlimited’ data plans. While the act of throttling data speeds is not exactly frowned upon, the way in which TracFone implemented it was the issue.

While advertising ‘unlimited’ plans, users on TracFone saw throttled speeds after only 1-3GB of usage, then a complete suspension in service after 4-5GB of data. The FTC wants it to be known that they will not stand for false advertising, but as long as the terms of a plan are fully disclosed, carriers need not worry. 

Jessica Rich, director of the FTC’s Bureau of Consumer Protection stated, “The issue here is simple: When you promise consumers ‘unlimited,’ that means unlimited.”

As for the two largest US carriers (Verizon and AT&T), they no longer offer ‘unlimited’ plans anymore to new customers. Instead, they have switched to an allotted amount of data, such as 3GB, 5GB, or 10GB for a family. Once a user passes this amount, they either pay more for high-speed data or get kicked down to a slower network. T-Mobile currently offers an Unlimited plan with no throttling for $80 a month, while Sprint offers an unlimited plan for $60 a month.

While the ruling is a good thing for consumers, and even those who saw slow downs from prepaid providers are eligible for refunds, you should always be aware of what the terms are for your plan.

Via: Re/code

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