triloks/iStock/Thinkstock(NEW YORK) — The Federal Trade Commission announced Wednesday that it had agreed to a $40 million settlement with TracFone over alleged deception involving “unlimited” data plans.
TracFone is the largest prepaid mobile provider in the U.S., according to the FTC. The agency claims that TracFone advertised unlimited data plans, but instead, when users surpassed a fixed amount of data in a one-month period, TracFone would throttle or slow down their data speed.
According to a complaint, “customers often experienced slow-downs of at least 60% and sometimes even 90%, significantly impairing their ability to engage in online activities.” The FTC said that one TracFone employee who tested the effects of throttling said that “customer experience is affected because it is very slow…’regular’ users like me may get upset.”
The FTC claims that there was no technical reason for the company to limit data; instead, the decision to do so was made to “reduce the high costs associated” with the unlimited data.
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