AT&T Inc. (NYSE:T) is in news following a lawsuit from the Federal Trade Commission over the data carrier’s practice to cut data speed in their unlimited data plans. The FTC called it deceptive and accused the company of misleading millions of Smartphone users with its data plan.
The second largest telecom carrier in U.S. is accused of deceptive practices by the FTC, which said that the company reduced data speeds of over 3.5 million customers after reaching a specific limit without conveying these terms to the customers. According to WSJ,
“The FTC claims AT&T failed to adequately inform customers that their data speeds would be throttled once they reached a certain level of usage during a billing cycle. AT&T has throttled data speeds for at least 3.5 million customers for a total of more than 25 million times, the FTC said.”
FTC has further asked the court to offer relief to the affected customers and bar AT&T Inc. (NYSE:T) from following any such practice in future. The chairman of FTC, Edith Ramirez, said,
“They stopped providing the service that customers understood they had purchased when they entered into their contrac. Customers would be subject to an early termination fee if they wanted to get out of their existing contract.”
In return, AT&T Inc. (NYSE:T) has released an official statement against these accusations calling them “baseless.” Wayne Watts, Senior Executive VP of the company, said, “The FTC’s allegations are baseless and have nothing to do with the substance of our network management program.”
He further added,
“We have been completely transparent with customers since the very beginning. We informed all unlimited data-plan customers via bill notices and a national press release that resulted in nearly 2,000 news stories, well before the program was implemented.”
Earlier, AT&T Inc. agreed to pay up to $105 million against FTC allegations of unauthorized changes in customer bills.
This article has been written by Prakash Pandey.