TracFone sold 'unlimited' data, then throttled and cut off heavy users

TracFone, the largest prepaid mobile provider in the US, sold monthly plans under Straight Talk, Net10, Simple Mobile and Telcel America with headlines promising 'unlimited' data for about $45 a month. Since 2009, the FTC charged, the company regularly slowed customers' data speeds — or cut their service off entirely — once they used more than a fixed amount in a 30-day window. Throttled customers often saw slowdowns of at least 60%, sometimes 90%; many lost talk, text and data altogether.

The limits were real thresholds: TracFone generally began throttling at 1–3 gigabytes and suspended service at 4–5 gigabytes. The company's own documents showed the caps existed to 'reduce the high costs associated' with honouring the unlimited promise, not to relieve network congestion. Warnings about 'excessive data usage' did not disclose the actual limits, and the disclosures TracFone began making in September 2013 were often buried in small print on the backs of packages and cards.

The FTC sued TracFone in January 2015 in the US District Court for the Northern District of California. TracFone agreed to pay $40 million in consumer refunds and to stop making claims about data plans without clearly disclosing any speed or quantity limits. The Commission vote was 5–0.