States announce $10.5 million settlement with wireless carriers over deceptive ads

Another industry is being exposed for years-long tricks it engaged in to fool consumers and make more money at their expense.

Major U.S. wireless carriers agreed to a $10.25 million settlement Thursday after an industry-wide investigation by a coalition of 50 state attorneys general of misleading advertising practices. 

The settlement, which applies to AT&T Mobility, Cricket Wireless, T-Mobile USA, Verizon Wireless, and TracFone Wireless, includes a payment of $10.25 million to the states.

“We have all heard and seen advertisements announcing too good to be true cell phone deals, offering wireless devices for free or ‘unlimited” data,’” California Attorney General Rob Bonta said in a statement. “Turns out, many of those deals are indeed too good to be true.”  

Wireless carriers have exploited the fact that cell phones are now essential to our day-to-day lives, especially for low-income or immigrant consumers who are more likely to depend on cell phone plans for internet access, Bonta said.

The settlement addresses the common misleading advertising practices committed by major wireless carriers including:

• “Unlimited” data advertisements, which failed to clearly disclose limitations. 
• “Free” phone offers, which failed to clearly disclose conditions. 
• Monetary incentives to “switch” wireless networks, which failed to clearly disclose how the monetary incentives would be provided. 
• Wireless carrier plan comparisons, which failed to disclose differences.

The settlement require the wireless carriers to: 

• Make all future advertisements and representations truthful, accurate, and not misleading.
• Refer in marketing to “unlimited” mobile data plans only where such plans don’t set any numerical limits on the quantity of data allowed during a billing cycle and clearly disclose any restrictions on data speed, as well as the triggers of restrictions.
• Offer to pay for consumers to “switch” carriers only where they clearly disclose the fees and amounts that they’ll pay consumers, the form and schedule that such payment will take, and all requirements that consumers need to satisfy to qualify and receive payment.
• Offer wireless devices or services for “free” or similar terms only where they disclose clearly all terms that the consumer needs to meet in order to receive the “free” devices or services. 
• Make offers to lease wireless devices only where it’s made clear to consumers that they’ll will be entering into a lease agreement. 
• Make representations that a consumer will save money by purchasing its products or services only where it has a reasonable basis to do so based on comparisons with the prices of comparable goods or services of other providers, or where any differences between those goods or services are clearly disclosed.
• Appoint a dedicated employee to work with the attorneys general to address complaints filed by consumers.
• Train customer service representatives who speak with consumers to comply with these terms.

It’s great the country has attorneys general at the state level looking out for the interest of consumers. More industrywide actions such this are need to protect the public.