Verizon, AT&T and T-Mobile will pay a total of US$10.22 million to the states to settle allegations that the three companies lied to customers about their ‘unlimited’ plans and ‘free’ phone offers. The settlement follows an investigation by a coalition of 50 Attorneys General that required the three companies to be more transparent in their advertising.
Under the agreement, Verizon, T-Mobile and AT&T will only be able to advertise ‘unlimited’ if there is no limit on the amount of data that can be used in a single billing cycle. The advertisement must “clearly and conspicuously” state that speed limits may apply and specify the amount of data a customer can use before it causes a speed reduction.
The Attorney General also pursued misleading claims by Verizon, T-Mobile and AT&T in their advertisements promising to ‘pay’ customers who switch carriers. The three companies must now clearly disclose the terms and conditions of their promotions, including the amount to be paid to customers and when it will be paid. Each operator must also disclose the conditions and hidden fees customers must meet to receive a ‘free’ cell phone.
AT&T, Verizon and T-Mobile have lied to millions of consumers, falsely promising free phones and “unlimited” data plans. ‘Large companies are not exempt from complying with the law and cannot trick consumers into paying for services they will never receive.
Verizon, T-Mobile and AT&T have to appoint a ‘special person’ to deal with customer complaints. The three companies deny any wrongdoing. “These voluntary agreements do not reflect a finding of improper behavior, but reaffirm the wireless industry’s longstanding commitment to openness and honesty in advertising so that consumers can make informed decisions about the products and services that are best for them. Nick Ludlam, senior vice president of CTIA, the trade association representing operators, spoke to The Verge.
This is not the only scrutiny the big three operators have faced recently. Last week, the US Federal Communications Commission fined Verizon, AT&T and T-Mobile nearly $200 million for allegedly illegally sharing customer location data.