Victims of deceptive “unlimited” plans paid hundreds, get just a fraction back.
AT&T has agreed to a $12 million settlement in a class-action lawsuit over its throttling of “unlimited” mobile data plans. As usual, refunds to individual customers amount to a fraction of what the customers paid for the hobbled service.
The paltry nature of expected per-person payments was explained last week by plaintiffs in a filing that asked the US District Court for the Northern District of California to approve the settlement. After administrative costs and attorneys’ fees, typical victims are expected to get $10 or $11 from the new settlement. Many of these same people previously received $12 each from a $60 million settlement between AT&T and the Federal Trade Commission, bringing the typical person’s total payout to $22 or $23. (The FTC/AT&T settlement applied to customers in any state, but the newly announced settlement is only for California residents.)
Customers paid AT&T $30 a month for unlimited data at a time when AT&T automatically throttled “unlimited” plans for the rest of the month once subscribers hit thresholds of either 3GB or 5GB. This throttling was particularly severe because it was enforced 24 hours a day regardless of whether there was any network congestion, and downloads were throttled to speeds as low as 128kbps. AT&T eased up on the throttling in 2014 and 2015 and now throttles only when consumers are connected to congested cell sites.
The FTC, which sued AT&T over the practice in 2014, said after the $60 million settlement that “AT&T promised unlimited data—without qualification—and failed to deliver on that promise.” The FTC had accused AT&T of violating US law against unfair or deceptive acts in commerce with its “unfair mobile data throttling program” and “deceptive failure to disclose [the] mobile data throttling program.”
The new class-action settlement says that, on average, settlement-class members exceeded the throttling thresholds during 7.5 monthly billing periods. This means customers paid AT&T an average of $225 for unlimited data in months they were throttled. Despite that, plaintiffs concluded that the $10 or $11 settlement payments are a good deal compared to what they would likely get at trial. “It is unlikely… that plaintiffs and the class could recover [$225 for each person], even assuming plaintiffs were to overcome the numerous remaining pre-trial obstacles, prevail at trial, and survive an inevitable further appeal,” plaintiffs wrote in their filing asking for [ … ]