PA Reaches Multi-Million Dollar Settlement With Mobile Device Carriers for Misleading Consumers with ‘Free’ Phones, ‘Unlimited’ Data

Attorney General Michelle Henry announced a $10.25 million, 50-jurisdiction settlement with several major mobile device service carriers regarding allegedly deceptive advertising practices, including claims of “unlimited” data plans and “free” phones.

The multi-jurisdictional settlement reached with AT&T, Verizon Wireless, Cricket, and T-Mobile requires the carriers to be truthful in future advertising, disclose all attached fees and agreements, and train customer service staff accordingly.

Pennsylvania will receive over $260,000 in costs and fees as part of the settlement.

“The demand and need for mobile devices are extraordinary, and Pennsylvanians deserve reliable information and the truth about costs when making important decisions that impact their budgets,” Attorney General Henry said. “For far too long, these major carriers have been advertising free devices that actually involve significant costs for the consumer.”

The terms of the settlements address misrepresentations in advertisements concerning: “unlimited” data advertisements, “free” phone offers, monetary incentives to “switch” wireless networks, and wireless carrier plan comparisons. The carriers allegedly neglected to clearly and conspicuously disclose the limitations, conditions, and differences in these offers.

The settlement, in the form of an Assurance of Voluntary Compliance, will, among other things, require the wireless carriers to:

  1. Make all future advertisements and representations truthful, accurate and non-misleading;
  2. Refer in marketing to “unlimited” mobile data plans only where such plans do not set any numerical limits on the quantity of data allowed during a billing cycle and clearly and conspicuously disclose any restrictions on data speed, as well as the triggers of such restrictions;
  3. Offer to pay for consumers to “switch” carriers only where they clearly and conspicuously disclose the type of fees and amounts that they will pay consumers, the form and schedule that such payment will take and all material requirements that consumers must satisfy in order to qualify and receive such payment;
  4. Offer wireless devices or services for “free” or similar terms only where they disclose clearly and conspicuously all material terms and conditions that the consumer must meet in order to receive the “free” devices or services;
  5. Make offers to lease wireless devices only where it is made clear to the consumer that the consumer will be entering into a lease agreement;
  6. 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 material differences between those goods or services are clearly and conspicuously disclosed; and
  7. Appoint a dedicated employee to work with the attorneys general to address ordinary complaints filed by consumers;
  8. Train its customer service representatives who speak with consumers to comply with these terms and implement and enforce a program to ensure compliance with these terms.

Settlements were filed with carrier companies: AT&T Mobility, LLC; Cricket Wireless, LLC; T-Mobile USA, Inc.; and Cellco Partnership — which does business as Verizon Wireless, and TracFone Wireless, Inc.

Please click here to view the states’ agreement with AT&T Mobility, LLC and Cricket Wireless, LLC. 

Please click here to view the states’ agreement with T-Mobile USA, Inc. 

Please click here to view the states’ agreement with Cellco Partnership, d/b/a Verizon Wireless, and TracFone Wireless, Inc.