T-Mobile Fined for Undisclosed Limits on Unlimited Databy
FCC announces $48 million in penalties over data plans
Settlement includes discounts for customers, FCC says
T-Mobile US Inc. will pay $48 million in penalties because it didn’t clearly disclose limits to wireless data plans sold as unlimited to “unhappy” customers left to complain about sluggish performance, regulators said.
The Federal Communications Commission on Wednesday announced the settlement, including a $7.5 million fine and $35.5 million worth of discounted gear or data for customers of third-largest U.S. wireless carrier T-Mobile and its MetroPCS unit.
An investigation found that company policy allows T-Mobile to decrease data speeds when customers on plans sold as unlimited exceed a monthly data threshold, the FCC said in a news release. The agency heard from hundreds of “unhappy” customers who complained of slow speeds and said they weren’t receiving what they were sold, according to the news release.
“Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” said Travis LeBlanc, the FCC’s enforcement bureau chief. “When broadband providers are accurate, honest and upfront in their ads and disclosures, consumers aren’t surprised and they get what they’ve paid for.”
T-Mobile failed to adequately inform its unlimited data plan customers that, under a “Top 3 Percent Policy,” their data would be slowed at times if they used more than 17 gigabytes in a given month, the FCC said. It said the company had agreed to update its disclosures to better explain who may be affected.
T-Mobile Chief Executive Officer John Legere tweeted, “Good settlement with FCC today. @TMobile believes more info is best for customers.”
The carrier Bellevue, Washington-based carrier dropped 40 cents to $46.95 at 11:15 a.m.
T-Mobile also is to spend at least $5 million dollars to help low-income school districts provide broadband service and equipment to students, the FCC said.
Last year the FCC proposed fining AT&T Inc. $100 million for misleading customers about unlimited mobile data plans, and that company is fighting the penalty, arguing it met disclosure requirements. The FCC is reviewing AT&T’s response, said Will Wiquist, an agency spokesman.
AT&T in August won dismissal of a U.S. Federal Trade Commission lawsuit accusing the company of deceiving at least 3.5 million smartphone customers who paid for unlimited data plans only to have their download speeds cut.