Unlimited Data Plan Scam Causing FTC To Sue AT&T

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AT&T is being sued by the Federal Trade Commission (FTC) for misleading their customers into believing that they were receiving an "unlimited data plan" when they were really having their internet speeds decreased by up to 90 percent.

On Tuesday, October 28, the FTC filed a complaint against the company at the U.S. District Court in San Francisco, California, explaining that they were convincing customers to take part in a more expensive unlimited plan and then would decrease the Internet speed to resemble that of dial up.

The customers were not being notified of the change in Internet speed and the decreased speed caused many of their smartphone apps- GPS, streaming videos and music, and Internet browser- to run slowly or not at all.

"AT&T promised its customers 'unlimited' data, and in many instances, it has failed to deliver on that promise," FTC Chairwoman Edith Ramirez said in a statement. "The issue here is simple: 'unlimited' means unlimited."

"Even as unlimited plan consumers renewed their contracts, the company still failed to inform them of the throttling program," the statement continued. "When customers canceled their contracts after being throttled, AT&T charged those customers early termination fees, which typically amount to hundreds of dollars."

AT&T, the second largest cellular carrier, has of course denied the accusations.

"The FTC's allegations are baseless and have nothing to do with the substance of our network management program," AT&T senior executive vice president and general counsel Wayne Watts said in a statement.

"It's baffling as to why the FTC would choose to take this action against a company that, like all major wireless providers, manages its network resources to provide the best possible service to all customers, and does it in a way that is fully transparent and consistent with the law and our contracts," he added.