The only warning TracFone gave users was a recorded message saying “. . . if your excessive data use continues, we may need to suspend or deactivate your data service or terminate your phone service altogether as specified in the terms and conditions of service. . . .”. However TracFone's terms and conditions did not disclose that there were limits or that data would be throttled or terminated if those limits were exceeded.
The FTC indicated that it does not object to throttling or data caps has long as they are clearly and conspicuously disclosed to prospective customers.
Beginning around Sept 2013, Tracfone stopped cutting off user's data and started specifying that speeds would be slowed if the user's data use exceeded a specific limit of 2.5 or 3 GB. However the FTC said those disclosures, printed in a tiny font on the backs of refill cards and phone packages and at the bottom of point of sale displays and TV ads did not meet the legal requirement to clearly and conspicuously disclose the limits of TracFone's "unlimited" service.
The FTC has ordered Tracfone to conspicuously disclose its limitations on data speed and quantity in all future advertising and sales materials. TracFone must also pay $40 million into a fund that the FTC will distribute to TracFone customers whose data was throttled or cut off.
If you had a Straight Talk, NET10, Simple Mobile or Telcel America unlimited plan at any time between July 24, 2009 and December 31, 2014 and had your data throttled or cut off you are eligible for a refund. To claim your refund you need file a claim online at www.PrepaidPhoneRefund.com.
Although today's order only applies to TracFone, the FTC warned other mobile providers that they have a legal requirement to clearly disclose the limits of their "unlimited" plans and could face similar FTC actions against them if they do not.