DALLAS – AT&T will pay $60 million in a settlement with federal regulators after it was accused of slowing data speeds for millions of wireless customers who paid for “unlimited” plans. The Federal Trade Commission announced the settlement Tuesday.
Federal regulators sued AT&T in 2014, saying the nation’s second-largest wireless carrier had been deceiving customers since 2011. In the complaint, federal regulators said the company advertised plans as “unlimited,” but would reduce customers’ internet speeds by as much as 90 percent.
It alleged the company did not adequately disclose to customers that it would slow data speeds once the customers used a certain amount of data in their monthly billing cycle. By throttling the data, federal regulators said AT&T made it difficult for customers to stream video, use GPS navigation and browse the internet.
AT&T called the complaints “baseless.” In statements and interviews about the litigation, AT&T officials said it notified customers in text messages and emails when they hit data limits to warn them about slower speeds.
AT&T had been contacted for comment about the FTC settlement.
As part of the settlement, the FTC required AT&T to step up its disclosures. When AT&T advertises wireless plans, the FTC said it must clearly disclose any restrictions, such as data caps that would trigger slower speeds – and not put those details in fine print.
AT&T’s $60 million payment will fund partial refunds for current and former customers who signed up for AT&T unlimited plans prior to 2011 and were throttled by the company. Affected customers will automatically receive credit on their bills or will get a check, if they are no longer an AT&T customer, according to the FTC’s news release.
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