Home - , , , , , , - FTC Orders Straight Talk, NET10, Simple Mobile and Telcel America to Refund $40 Million to Users Whose Data Was Throttled or Cut Off

FTC Orders Straight Talk, NET10, Simple Mobile and Telcel America to Refund $40 Million to Users Whose Data Was Throttled or Cut Off

The Federal Trade Commission today fined America Movil's TracFone subsidiary $40 million for advertising but not delivering unlimited data. The FTC says that from 2009 through 2014, the various TracFone brands including Straight Talk, NET10, Simple Mobile and Telcel America advertised "unlimited data" without mentioning that data speeds would be severely throttled or data service cut off if undisclosed limits were exceeded. According to the FTC, the limits varied, with throttling starting when users used more than one to three GB in a 30 day plan period with data being cut off completely when usage exceeded four or five GB.

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.

Source: FTC

49 comments:

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  1. I knew about Straight Talk and Net10 but I never heard anything about Simple Mobile doing this. I wonder if TracFone owned Page Plus was doing the same thing?

    Isn't H2O guilty of the same with their 2GB plan being throttled after only 1GB of usage?

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    1. TracFone, Net10, Straight Talk, Page Plus, and Simple Mobile are ALL owned by América Móvil... so I believe they all have these kinds of restrictions in place that essentially defeats the purpose of any sort of data allotment, however high they're advertised to be.

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    2. PagePlus didn't have unlimited data plans before 12/17/14 so throttling probably wasn't used for most of the period affected by the FTC order.

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    3. What about H2O?

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  2. "The FTC says that from 2009 through 2014, the various TracFone brands including Straight Talk, NET10, Simple Mobile and Telcel America advertised "unlimited data" without mentioning that data speeds would be severely throttled or data service cut off if undisclosed limits were exceeded."

    Here's why I didn't subscribe to any of AV's services: initially, until they instituted the 3GB cap, they prohibited ANY streaming of audio or video in addition to banning "downloading". Now, what the hell is the point of having unlimited service if the ways of utilizing the most data are immediately taken off of the table? It was tantamount to telling me that I could have $1MM but I had to withdraw it at the rate of $1 per day.

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    1. Great analogy! All these restrictions are in the fine print. It's just people are too dumb to read them or do their research. I also heard that they reserve the right to terminate your service for any reason at any time and that any monetary balance in your account at the time will be forfeited.

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    2. I hope this means the *END* of this Unlimited Data Nonsense, and you losers who engage in streaming video and music will end up paying for it on your own dime rather than by forcing people like me who aren't interested in it to support your crap.

      Just another thing you asshats have ended up ruining.

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    3. Those of us who stream video and audio on plans THAT THEY PAY FOR aren't doing anything wrong, and certainly aren't forcing you to pay for anything at all. They are paying for it themselves... 100% of it, all "on their own dime", and not yours.

      They are no more "losers" than those who drink the last quarter of a gallon of milk they buy. Or those who dare to pay for a movie ticket and sit through the end credits. Sorry, son, your rant was nonsense in all ways.

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  3. PrepaidPhoneNews.com
    reports about
    PrepaidPhoneRefund.com

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  4. Should the FTC not also warn MagicJack for its unlimited calling that is stated as 20 times the average usage in it's TOS, without an exact usage limit or way to tell your current usage.

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    Replies
    1. What do you mean?

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    2. They should. If MagicJack is indeed advertising "unlimited" and they cut off calls. they should be clobbered too. For making fraudulent claims.

      This is a lot more cut and dried. There's no way to throttle down the speed of a voice call after all :)

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  5. Get ready for a rate hike!

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    1. We smart consumers won't have to be ready for anything because we're smart enough to stay away from any and all MVNOs owned or associated with América Móvil (TracFone, Net10, Straight Talk, Page Plus, and Simple Mobile!

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    2. A rate hike would be unwise given the fierce competition.

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    3. "Get ready for a rate hike!"

      Or maybe just get ready for them to provide the actual advertised service at the advertised price. That's not too much to ask, is it?

      It's not like there's any monopoly involved: hike rates, lose customers to those that don't.

      Rate hikes tend to go in increments of $5 or so, and if any of these plans did go up that much, they've wiped out any advantage they now have, if any, over Kitty, Cricket, or any of these more and more numerous T-Mobile variations which are being marketed aggressively.

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  6. I filed for compensation. " Hi thank you for calling ST my name is Tammy" Kiss it 5 ten minutes ST!"

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  7. What about their 100MB/day throttle, does this mean they can't do that anymore?

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    1. They would need to disclose clearly and conspicuously that they throttling at 100 MB/day if they want to continue that practice.

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  8. I'M SO GLAD THAT THIS HAPPEN TO TRACFONE. THEY REALLY DESERVE IT FOR FOR DOING BUSINESS THE WRONG WAY. THEY DID THAT TO ME WHEN I HAD SIMPLE MOBILE. THEY THOUGHT THAT NO ONE WAS GONNA REPORT IT, THIS IS AMERICA NOT MEXICO.

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  9. Too bad that they have ruined Page Plus Cellular too.

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  10. Got my claim submitted. Thanks for the information!

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  11. The throttling polices kept me off Straight Talk. Straight Talk directly told me they would throttle on a whim, even for small data usage, and had no set rules on it.

    They deserve massive fines, and to be forced to pay generously to anyone promised unlimited data but were cut off.

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  12. I also hope those who do any sort of sneaky throttling without ever announcing it, like Cricket is accused of doing, consider this a warning and completely stop it...

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    Replies
    1. What throttling is Cricket doing?

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  13. Don't know. but there were reports in the past here of them purposefully throttling down the rate. But at some sort of random plan, all during the data month. No, I'm not talking of the actual throttle limits after a certain point which they clearly advertise.

    Perhaps the Cricket complainant will read this and pipe up...

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  14. Carlos Slim should shell out the $$$$$$ from his own wallet. He has more than enough to go around.

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  15. Shouldn't Airvoice and Jolt also be fined for cutting off data after only half of the plans included data is used?

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  16. Go to the MagicJack website, it states "UNLIMITED local & long distance
    calling to the U.S. and Canada." This is NOT true, here are some MagicJack
    facts:

    1) Make more than 50 outgoing calls to different numbers in one day and your
    service will be terminated (within 24 hrs). Calling the same number 2 or more
    times in a day only counts once towards the max of 50.

    2) Your account can be put on hold and audited for excessive use, this seems
    to be a common problem for those who purchase the 5 year plan and use the
    phone a lot. I have seen no posts from MagicJack users who have had service
    restored after an audit. Some MagicJack users have reported that they can not
    renew their service because they are being audited for excessive use.

    3) MagicJack will not issue a refund for any remaining service if your account is
    terminated.

    4) Calls to some numbers are NOT Free, you will get a message stating that
    this call requires additional funds in your account and will cost 1 or more
    cents per minute. This is not really MagicJack's fault, some CLEC's charge
    excessive termination fees that can not be absorbed when customers only pay
    $29 to $39 a year.

    5) Do not make an outgoing call for more than 90 days and you will loose your
    number (but not your service), incoming calls don't count and will NOT keep
    you from loosing your number.

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    1. Doesn't seem so bad. Who is going to be inconvenienced by (1) except for those who engage in telephone harassment (i.e. telemarketers)?

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    2. I gave my magicJ to my brother cause the call quality was not good, and he needed the least expensive service. When we talked on the phone it sounded like he was talking inside of a big, old metal drum. After a while even he got tired of explaining this to people so he cancelled service.

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  17. Customer Service could not explain why I could not use 2.5gb's of data. I was 2 weeks in with my service when all of a sudden I get a message saying my "allotted high speed limit has been reached." I contacted customer service and they could not explain why. The only explanation I was given was a 'cut and paste' from their 'policy' which pissed me off even more. I rechecked my data and received a message saying my usage was approximately 1.25gb, far from the 2.5gb allowed. Does this make any sense? What a total rip off. It's like you buy a 12 inch hoagie but get a 6inch with a pamphlet explaining they can change the size whenever they want despite what you ordered. Totally crazy how they get away with this.

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  18. "Totally Crazy" Anon...

    I know what you mean. However, I found out about this before getting the service (Straight Talk, same company) and it made me decide to never touch it with a ten foot pole.

    I called their CS on the phone. I asked them about their policy. They guy explaining it was exactly like the worst description of their policy. He said that they could cut off service well short of the 2.5gb or whatever max for any subjective reason. I pressed him to define this, and he said that it depended on the feelings "discretion" of the team monitoring traffic constantly.

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  19. I have been calling customer service and all they could say is that it says it on the card when u purchase it... and I said yea it says unlimited data in bold letters and that's what everyone sees when they buy any unlimited phone card... but they did teach me to read the fine print but it's pisted me off when they said they couldn't do anything... then I had asked well what would cause my data usage to do that and they couldn't tell me anything I had to Google it so I started to exit out of everything like I'm suppose to and it still doesn't help... it drives me crazy so I am so so so happy they are finally doing something about it and hopefully they do get it tooken care of.... THANK YOU

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  20. Got the paper to file for straight talk. Tried to go on line and apply. But straight talk as it blocked.

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  21. I switched from Simple Mobile to Tmobile because I had an Unlimited Plan and they shut off my internet every month

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  22. I received the notice by mail approx. March 27,2015. This is THE 3RD TIME I have tried to file my claim (I had straight talk) AND EVERY TIME IT SAYS web page not available. Come on get this fixed before June gets here people.

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    1. Same here but also get security warnings. They don't want you to apply but they sure didn't hesitate suspending me before twice threatening to ditch me.

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  23. Senate Moves to Extend Move to Extend NSA Powers to Collect Phone Data - http://recode.net/2015/04/22/senate-republicans-move-to-extend-nsa-power-to-collect-phone-data/

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  24. Tracfone Refund Claim Deadline last day is NEXT Friday. June 19th @ www.prepaidphonerefund.com

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  25. Tracfone Refund Claim Deadline TODAY - If You Had a Straight Talk, Net10, Simple Mobile, or Telcel America "Unlimited" Mobile Service Plan, you may be entitled to a CASH REFUND from a class action settlement. https://www.prepaidphonerefund.com/

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    1. Settlement Status: On July 2, 2015, the Court granted final approval to the settlement, approved the attorney’s fees and expenses, and approved the service awards for the class representatives. A copy of the Final Approval Order is available here.

      The settlement becomes effective August 1, 2015, and checks will be mailed on or before October 20, 2015.

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    2. Update: Tracfones' $40M FCC Fine - An appeal has been filed regarding the approval of the settlement. Until that appeal is resolved, no funds will be distributed as currently scheduled, the appeal will not be heard until 2016.

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  26. Can anyone explain why Net10 can throttle my data speed at 1.4 gb (according to Net10...not what my phone estimates) when my plan allows 1.5 gb at high speed? It was throttled a couple days before our next period. the worthless agent I got a hold of just kept saying the same things over and over...I was "getting close to the limit". Normally I'm on wifi most of the time and so I don't get close, but our son was in the hospital for 3 weeks and the wifi signal was too weak to use so I was a data "hog" that month. They really pissed me off, but I don't know who to talk to that would even care about the bs they pulled. Is it just the nature of these cheap alternatives that they can throttle prematurely and get away with it?

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    Replies
    1. The large print giveth. The small print taketh away.


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    2. Do you know how much data you actually did use? Your phone might estimate 1.4GB but you may have really used 1.5GB. 100MB is just too little data to accurately account for. $40 is too much to be paying for only 1.5GB. Depending on which network works best for you, you could get
      3GB on T-Mobile Simply Prepaid or MetroPCS for $40
      2.5GB on Cricket (AT&T) for $35 with auto pay or 5GB for $45
      2GB on AT&T GoPhone for $45
      2GB on Selectel (Verizon) for $40
      Keep in mind that Straight Talk, Total Wireless, Page Plus, Simple Mobile, Telcel America and Tracfone are all the same company as Net10 with the same customer service.

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