Verizon, AT&T, and T-Mobile have agreed to pay a total of $10.22 million to a coalition of states to resolve allegations that they deceived customers with their "unlimited" plans and "free" phone promotions. As part of the settlement reached after an investigation by 50 attorneys general, the three carriers are obligated to improve the transparency of their advertising.
Verizon, T-Mobile, and AT&T are only allowed to promote their plans as “unlimited” if there are no restrictions on the amount of data a person can use in a billing cycle. The advertisements must clearly state that speed limitations may apply and must also specify the data usage threshold that triggers the slowdown.
The attorneys general also took action against Verizon, T-Mobile, and AT&T for their potentially deceptive advertisements that promised to "pay" customers to switch carriers. As a result, these companies are now required to transparently disclose the terms and conditions of their offers, including the specific amount customers will receive and the timeline for payment. Additionally, they must reveal the conditions customers need to meet in order to qualify for "free" phone offers, as well as any concealed fees.
"AT&T, Verizon, and T-Mobile deceived millions of consumers with false claims of free phones and 'unlimited' data plans that were not accurate," stated New York Attorney General Letitia James. "Large corporations are not exempt from abiding by the law and cannot deceive consumers into paying for services they will never actually get."
Verizon, T-Mobile, and AT&T are required to appoint a "dedicated representative" to handle customer complaints. The companies claim they have not done anything wrong. Nick Ludlum, the senior vice president of the CTIA, the trade group representing the carriers, tells The Verge, "These voluntary agreements do not indicate any improper conduct and reaffirm the wireless industry’s commitment to clear and honest advertising, allowing consumers to make informed decisions about the products and services that best suit them."
Recently, the three major carriers have faced additional scrutiny. The Federal Communications Commission fined Verizon, AT&T, and T-Mobile nearly $200 million last week for allegedly illegally sharing customers' location data.