Attorney General James Secures More Than $10 Million from AT&T, T-Mobile, and Verizon Wireless for Deceptive Advertising

 

Multistate Investigation Found that Wireless Service Providers Misled Millions of Americans with Deceptive Ads about “Unlimited” Data Plans and “Free” Phones

New York Attorney General Letitia James and a multistate, bipartisan coalition of 50 attorneys general today secured more than $10.22 million from AT&T Mobility, LLC and its subsidiary Cricket Wireless, LLC (AT&T); T-Mobile USA, Inc. (T-Mobile); and Cellco Partnership d/b/a Verizon Wireless and its subsidiary TracFone Wireless, Inc. (Verizon), for deceptively marketing wireless service plans for years. A multistate investigation found that the companies made false claims in advertisements in New York and across the nation, including misrepresentations about “unlimited” data plans that were in fact limited and had reduced quality and speed after a certain limit was reached by the user. The companies will pay $520,000 to New York and are required to change their advertising to ensure that wireless service plans are accurately and fairly explained.

“New Yorkers, and all Americans, deserve to know that when they buy a service or product, they will be treated fairly and can trust what the seller is saying,” said Attorney General James. “AT&T, Verizon, and T-Mobile lied to millions of consumers, making false promises of free phones and ‘unlimited’ data plans that were simply untrue. Big companies are not excused from following the law and cannot trick consumers into paying for services they will never receive. We will continue to go after companies that hurt everyday Americans and try to take advantage of this basic and critical service.”  

The multistate investigation found that the wireless companies made several misleading claims in their advertising, including misrepresenting “unlimited” data plans that were actually limited, offering “free” phones that came at a cost, and making false promises about switching to different wireless carrier plans. These advertisements, which were broadcast on TV and online, lured consumers to sign up for plans that did not live up to their promises and that typically failed to disclose key limitations, restrictions, or details.

Today’s agreement requires the wireless service providers to pay $10,224,135 to the states and improve their advertising and marketing of their services to consumers. The wireless services providers are required to ensure that: 

• All advertisements and representations are truthful, accurate, and non-misleading; 
• “Unlimited” mobile data plans can only be marketed if there are no limits on the quantity of data allowed during a billing cycle; 
• Offers to pay for consumers to switch to a different wireless carrier must clearly disclose how much a consumer will be paid, how consumers will be paid, when consumers can expect payment, and any additional requirements consumers have to meet to get paid; 
• Offers of “free” wireless devices or services must clearly state everything a consumer must do to receive the “free” devices or services; 
• Offers to lease wireless devices must clearly state that the consumer will be entering into a lease agreement; and 
• All “savings” claims must have a reasonable basis. If a wireless carrier claims that consumers will save using its services compared to another wireless carrier, the claim must be based on similar goods or services or differences must be clearly explained to the consumer. 

In addition, the companies must appoint a dedicated representative to work with the attorneys general to address ordinary complaints filed by consumers. They must also train their customer service representatives to comply with the terms of the agreement and implement and enforce a program to ensure compliance.

Joining Attorney General James in today’s agreement are the attorneys general of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawai’i, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming, and the District of Columbia.