T-Mobile fined $48 million for misleading customers

The FCC fined T-Mobile $48 million following an investigation into the company’s so-called “unlimited” data plan. As Speed Matters wrote when the plan was announced, a closer look at T-Mobile ONE – described by the company as “unlimited everything” – shows that the plan in fact has significant limitations and that T-Mobile promises more than it delivers – conclusions confirmed by the FCC’s enforcement action.

Back in August, T-Mobile announced “T-Mobile ONE,” its new “unlimited” data plan. However, in reality, the plan has significant limits: it caps hotspots usage and then up-charges for normal data speed, it throttles video and then up-charges to higher quality.

Following an FCC investigation into T-Mobile’s plan, the regulatory agency found that “company policy allows it to slow down data speeds when T-Mobile or MetroPCS customers on so-called ‘unlimited’ plans exceed a monthly data threshold.” According to the FCC, T-Mobile’s “advertisements and other disclosures may have led unlimited data plan customers to expect that they were buying better and faster service than what they received.”

The total $48 million fine will be a combination of direct financial penalties, consumer benefits, and equipment to American schools.

“Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” FCC Enforcement Bureau Chief Travis LeBlanc said in a statement. “When broadband providers are accurate, honest and upfront in their ads and disclosures, consumers aren’t surprised and they get what they’ve paid for.”

Well, honesty and disclosure aren’t T-Mobile’s strong suit. A report by Change to Win’s Retail Initiative found that T-Mobile’s wireless service advertisements mislead customers and resulted in “unexpected obligations for the company’s subscribers—too often leaving consumers with hundreds or even thousands of dollars in unanticipated charges, at the mercy of aggressive debt collectors and with little recourse to dispute charges.”

“Since the launch of T-Mobile One, the company has doubled down on deceptive ‘unlimited’ data claims,” Change to Win said about the FCC’s enforcement action. “T-Mobile has a history of engaging in deceptive advertising including false ‘no contract’ claims and often unfulfilled promises to pay early termination fees. Today’s settlement is a needed first step in holding T-Mobile accountable to its customers.”

Links:

FCC Reaches $48 million Settlement with T-Mobile to Address Inadequate Disclosures of ‘Unlimited’ Data Plan Restrictions (FCC, Oct. 19, 2016)

T-Mobile’s “unlimited” data plan that isn’t (Speed Matters, Aug. 19, 2016)

T-Mobile's business practices: deceptive, abusive (Speed Matters, Dec. 10, 2015)

Unmasking the Un-Carrier: Deception and Disparate Impact at T-Mobile (Change to Win, Dec. 2015)