Blog

enforcement

State attorneys general accused the companies of misleading claims around unlimited plans and free devices.

Photo of New York Attorney General Letitia James from her office’s website

WASHINGTON, May 16, 2024 – The New York Attorney General announced on May 9 a $10.2-million settlement with AT&T, Verizon, and T-Mobile for allegedly deceptive advertising practices.

AT&T will pay a total of more than $2 million and Verizon and T-Mobile will each pay a total of more than $4 million to a coalition of 49 state attorneys general, plus the District of Columbia. The companies denied any illegal conduct as part of the settlement.

“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,” New York AG Letitia James said in a statement. “Big companies are not excused from following the law and cannot trick consumers into paying for services they will never receive.”

The states’ investigation found that the companies represented plans with data caps as unlimited, advertised free phones that customers ultimately had to pay for, and made false claims about covering the cost to switch carriers.

“These advertisements, which were broadcast on TV and online, lured consumers to sign up for plans that did not live up to their promises and that typically failed to disclose key limitations, restrictions, or details,” the New York AG’s office said in a statement.

As part of the agreement, the carriers agreed to a number of provisions. Those include only using the term unlimited to market plans with no limits on data during a billing cycle, clearly stating what customers must do to receive a free device – including any other requisite purchases or fees, and clearly disclosing requirements and timelines for covering the cost to switch carriers. They will also have to train customer service reps to comply with the agreement.

Those restrictions, except the ones related to free devices, will expire in five years, according to the settlement agreement.

“After nine years, we are glad to move on from this industry-wide investigation with this settlement and a continued commitment to the transparent and consumer-friendly advertising practices we’ve undertaken for years,” T-Mobile said in an email to Broadband Breakfast.

Last week’s settlement is small compared to the combined $200-million fine the Federal Communications Commission issued the same three carriers last month. The agency found the companies illegally sold customer location data without consent. All three signaled intent to appeal that fine.

AT&T and Verizon referred Broadband Breakfast to CTIA, the wireless industry trade group.

“These voluntary agreements reflect no finding of improper conduct and reaffirm the wireless industry’s longstanding commitment to clarity and integrity in advertising so that consumers can make informed decisions about the products and services that best suit them,” CTIA said in an email.

Source