The US Federal Trade Commission (FTC) has recently lodged a federal lawsuit against AT&T for misleading customers regarding the telco’s Unlimited Data Plans, according to The New York Times.
In 2011, AT&T announced that it would slow down the internet connections of smartphone customers who subscribed to this scheme and utilised a substantial amount of data.
However, this announcement is drawing criticism because the company did not specifically outline the monthly data limit or the extent to which the internet speeds would be reduced, said the watchdog group.
AT&T subsequently decreased the internet speeds of clients who surpassed 2GB of data in one month. For some customers who breached that limit, download speeds have been reduced by up to 95 per cent. As a result, some clients were unable to use certain applications or even access the web.
“AT&T promised its customers unlimited data, and in many instances it has failed to deliver on that promise. The issue here is simple: ‘Unlimited’ means unlimited,” said FTC Chairperson Edith Ramirez.
Although the agency is not capable of imposing fines, it plans to seek millions of dollars to compensate the telco’s clients.
AT&T claims that it properly informed its customers via press release and bill notices. Additionally, the threshold only affected about three per cent of its clients, said Wayne Watts, the telco’s general counsel and senior executive vice president.
However, the FTC countered that the measure has affected a quarter the 14 million AT&T clients who subscribed to this plan.