T-Mobile will pay $48 million as part of a settlement over inadequate disclosure of restrictions on the unlimited data plans it offered consumers, the Federal Communications Commission announced Wednesday.
The cellular provider will pay a $7.5 million fine and $35.5 million to T-Mobile and MetroPCS customers with unlimited plans as part of a settlement of an investigation into whether the company adequately informed unlimited data subscribers about speed and data restrictions, the FCC said.
T-Mobile could slow down customers' data speeds when they exceed a monthly data threshold, the agency's investigation found. “Consumers should not have to guess whether so-called ‘unlimited’ data plans contain key restrictions, like speed constraints, data caps, and other material limitations,” said FCC Enforcement Bureau Chief Travis LeBlanc in a statement. “With today’s settlement, T-Mobile has stepped up to the plate to ensure that its customers have the full information they need to decide whether ‘unlimited’ data plans are right for them.”
The FCC said that the company's advertisements and other disclosures may have misled customers by failing to let them know that unlimited data customers would have their data speeds slowed if they used more than 17 Gigabytes in a month. Consumers told the agency that this practices made the network unusable for them at times.
Unlimited plans and stream-lined consumer offerings for data, calls and texting without overage fees have helped T-Mobile grow its customer base to become the No. 3 wireless provider with 52.5 million customers. Competitors including AT&T and Sprint have countered with their own programs.
Last year, the FCC proposed a similar action against AT&T with a potential $100 million fine for misleading unlimited data customers. AT&T has filed a response, which is still under review by the FCC.
Customers eligible for benefits -- including 20% discounts on accessories and an additional 4GB of data for their plan -- will be notified by December 15. For more information, consumers can visit the T-Mobile and MetroPCS web sites.
Under the settlement, T-Mobile will also update its customer education materials to explain this “Top 3 Percent Policy,” in which heavy data users have their speeds slowed and will notify customers via the network when their usage nears that level, the FCC said. T-Mobile will also donate at least $5 million for tablets and other devices to low-income school districts to combat the homework gap.
T-Mobile (TMUS) shares were down nearly 1% Wednesday to $46.90.
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