Jump to content


 


Register a free account to unlock additional features at BleepingComputer.com
Welcome to BleepingComputer, a free community where people like yourself come together to discuss and learn how to use their computers. Using the site is easy and fun. As a guest, you can browse and view the various discussions in the forums, but can not create a new topic or reply to an existing one unless you are logged in. Other benefits of registering an account are subscribing to topics and forums, creating a blog, and having no ads shown anywhere on the site.


Click here to Register a free account now! or read our Welcome Guide to learn how to use this site.

Photo

TracFone Fined $40M by FTC for Throttling 'Unlimited Data'


  • Please log in to reply
7 replies to this topic

#1 Animal

Animal

    Bleepin' Animinion


  • Site Admin
  • 34,833 posts
  • OFFLINE
  •  
  • Gender:Male
  • Location:Where You Least Expect Me To Be
  • Local time:03:53 PM

Posted 28 January 2015 - 02:38 PM

Recently the FTC has been quite interested in all things data stream related. One of those things being the throttling of whats known as 'Unlimited Data'. Seems most people's interpretation of unlimited is just that, UN Limited.

Well we all know that carriers do not seem to follow conventional definitions of terms. And it looks like the FTC wants the definition of Unlimited Data to mean the same thing to everyone. Consumers and carriers alike. So with backing of a $40 Million Dollar fine to TracFone. The FTC is sending a message that Unlimited means UN Limited. Not throttled.

TracFone advertised "unlimited text, talk, and data" for $45 a month under the brands Straight Talk, Net10, Simple Mobile, and Telcel America, and until September 2013, did not clearly disclose its throttling policies that saw customers experiencing data speeds that were cut by up to 90 percent, thereby violating the FTC Act.

While this ruling only affects TracFone at the current time, there are several other carriers that have similar practices for their unlimited customers. AT&T and Verizon no longer offer unlimited data plans, but continue to provide unlimited data for many people who remain on grandfathered plans. AT&T has engaged in throttling practices for years, often cutting off customers who exceed 5GB of LTE data usage.
"The issue here is simple: when you promise consumers 'unlimited,' that means unlimited," said Jessica Rich, director of the FTC's Bureau of Consumer Protection. "This settlement means that Straight Talk, Net10, Simple Mobile, and Telcel America customers will be able to get money back from the company for services the company promised but didn't deliver."


Above quote from an article by Juli Clover Wednesday January 28, 2015 10:38 am PST

The Internet is so big, so powerful and pointless that for some people it is a complete substitute for life.
Andrew Brown (1938-1994)


A learning experience is one of those things that say, "You know that thing you just did? Don't do that." Douglas Adams (1952-2001)


"Imagination is more important than knowledge. Knowledge is limited. Imagination circles the world." Albert Einstein (1879-1955)


Follow BleepingComputer on: Facebook | Twitter | Google+

BC AdBot (Login to Remove)

 


#2 NickAu

NickAu

    Bleepin' Fish Doctor


  • Moderator
  • 12,878 posts
  • ONLINE
  •  
  • Gender:Male
  • Location:127.0.0.1 Australia
  • Local time:08:53 AM

Posted 28 January 2015 - 03:54 PM

Now this is the sort of penalty’s I like to see, hit them so it hurts and send out a message to the other providers, For too long these company's have been getting away with murder just about. 

 

In Australia that same thing would have gotten $ 1000000 in fines if the company was unlucky. These people make huge profits ripping the little guy of, It's time to fight back.



#3 TheForestSpirit

TheForestSpirit

  • Members
  • 10 posts
  • OFFLINE
  •  
  • Local time:03:53 PM

Posted 28 January 2015 - 06:38 PM

Really, Im better at communicating with relevant images... And frankly I'm glad to see that this will definitely hurt them i can't wait to see if something like this will happen to some other businesses.

 

Anyway: http://i.imgur.com/BJwe6Kd.gif



#4 Bezukhov

Bezukhov

    Bleepin' Jazz Fan!


  • Members
  • 2,618 posts
  • OFFLINE
  •  
  • Gender:Male
  • Location:Providence, R.I.
  • Local time:06:53 PM

Posted 28 January 2015 - 07:29 PM

http://recode.net/2015/01/28/ftc-says-unlimited-data-with-throttling-doesnt-count-as-unlimited/

 

 

Update: In a conference call with reporters, Rich said that the FTC’s concerns relate specifically to how carriers are advertising their services.

“This case is about false advertising,” Rich said in response to a question from Re/code. “It’s not about throttling. We’re not challenging throttling in and of itself.”

Rich said that so long as it is made clear to customers, carriers can employ the practice: “If it’s clearly disclosed, if a company advertises unlimited, but very clearly discloses their practices with regard to throttling we would not challenge that action.”

That's it in a nutshell. It's not throttling per se, just that carriers should be upfront about it.


To err is Human. To blame it on someone else is even more Human.

#5 joshuals

joshuals

  • Members
  • 433 posts
  • OFFLINE
  •  
  • Gender:Male
  • Location:Quebec (Summer) Arizona (Winter)
  • Local time:06:53 PM

Posted 31 January 2015 - 12:43 AM

I have been waiting for this day since 2005!!!

At that time, before smartphones were thought-of, I purchased a PDA (Personal Data Assistant--it sure looked like a smartphone!) from my wireless carrier. The unit was capable Internet access (a first!!). The item was so revolutionary (at the time) that the salesman knew little about how it worked and there was no printed information with the unit setting forth the terms of use. The unit came with an "Unlimited Data Plan". Wow! I informed the salesman that I was purchasing it in order to stream audio from Internet radio stations, which were somewhat in their infancy at the time. It was quick sale.

As time progressed I checked my usage on my monthly bill.....the number of bytes downloaded was astronomical, but the charge was always zero! This was great!

After six months of this, however, I received a letter from the carrier instructing me to call a toll-free number regarding my account. The call led to the carrier's FRAUD department! The person to whom I spoke informed me that I was being investigated for misuse of their system and that I was going to have my account suspended. When I pointed out that I had an "unlimited data plan", the investigator stammered,

"Well.....unlimited doesn't REALLY mean unlimited. If we let everyone do what you are doing, it would shut our entire network down!"

He offered to let me continue to use the unit as I had been, but only if I was willing to pay a per-kilobyte charge. Just for fun I took my total usage to date and multiplied it by their suggested rate; it came to over $80,000! Needless to say I declined, and they disconnected me. No penalties or fines, and they did refund 85% of the purchase price of the unit. But still.....

In the follow-up documentation sent to me by the fraud department, along with my cancellation notice, was a sheet setting forth their terms of use ....the date of printing of that document was two months AFTER I had made my original purchase!!

So here we are, ten years later, and they're just getting around to clamp down on the concept that "unlimited doesn't really mean unlimited"!

Just as an after thought, despite my "fraudulent" misuse of the unit, that carrier is still in business today and boasts of how it's the largest 4G network in existence!!

#6 cat1092

cat1092

    Bleeping Cat


  • BC Advisor
  • 7,001 posts
  • ONLINE
  •  
  • Gender:Male
  • Location:North Carolina, USA
  • Local time:06:53 PM

Posted 04 February 2015 - 04:04 AM

 

 

So here we are, ten years later, and they're just getting around to clamp down on the concept that "unlimited doesn't really mean unlimited"!

 

That's why it's in the 'fine print' that unlimited is not truly such & has been for some time, this is normally buried somewhere in the agreement/contract. 

 

Like with AT&T, when they rolled out 'unlimited' landline phone service, it wasn't truly an 'all you can eat' buffet. There was a clause in there that for those who exceeded 'normal' usage patterns (more than 150% above average subscribers), the service could be terminated. There was a similar clause with my cell phone service by them (Cingular at the time), and later with Cricket Wireless. 

 

Speaking of Cricket, when they rolled out unlimited cell based Internet service, they were throttling speeds constantly, to the point I couldn't watch a YouTube video w/out it breaking up, or use Call Phones from GMail (free plugin to make free calls across the US & Canada). Yet they weren't cited nor fined for the practice & I ditched their service after just three months. 

 

I'm a current TracFone subscriber, though don't use it for data, just add minute cards only. While I agree with the fine, they picked a small reseller of data carriers to enforce this. The major players, AT&T, Verizon, Sprint & others are doing the very same thing in the US (& probably the EU) & aren't being punished. TracFone buys their data from other companies (AT&T in the US) & it's those providers doing the actual throttling. 

 

In my opinion, justice was half served at best. The FTC picked on a corporation with less money to put up a fight. They need to go after the larger players as well. In the end, it's consumers who'll lose, some of this cost will be added to the price of refill or top-off cards, I'm not looking for TracFone to totally eat this loss. 

 

However, all carriers should have it in plain view of these plans that this isn't a buffet. As far back as I can remember, regardless of the marketing of these plans, it's not truly unlimited, and neither are the speeds. 

 

Cat


Performing full disc images weekly and keeping important data off of the 'C' drive as generated can be the best defence against Malware/Ransomware attacks, as well as a wide range of other issues. 


#7 softeyes

softeyes

  • Members
  • 1,528 posts
  • OFFLINE
  •  
  • Gender:Female
  • Local time:03:53 PM

Posted 03 March 2015 - 01:05 AM

Unfortuately, the fine placed on TracFone is peanuts to the owner!

 

 

April 25 (Bloomberg) -- Congressional Republicans want to rein in a $2.2 billion U.S. mobile-phone subsidy for the poor, saying it’s riddled with fraud and benefits the world’s richest man, Mexican billionaire Carlos Slim.

Slim’s TracFone Wireless Inc. received about a quarter of the funds from the U.S. government’s Lifeline program, according to the latest figures. Today, a House subcommittee asked why the program, paid for by fees charged to U.S. phone subscribers, tripled in cost since 2008.

“It’s not fair that people save and work and pay for phones from whatever funds they have, and other people get them for free,” Representative Tim Griffin, an Arkansas Republican who wants to eliminate the mobile subsidy, said in an interview before the hearing. “It’s not fair the biggest beneficiary of this is Carlos Slim, the billionaire owner of TracFone.”

 

Slim owns Mexico’s biggest phone company, America Movil SAB, which offers mobile service in 17 Latin American countries and the U.S. Its TracFone unit is the largest recipient under the U.S. Federal Communication Commission’s Lifeline program, taking in $451.7 million, or 28 percent, of payments in 2011, the last year for which records are available.

 

Trust me, Slim operates with no regulations except his!  If you live close to the Mexican border, there are no Mexican regulations for cell tower signal, as the FTC regulates the US carriers. 

 

To alleviate text messages on a daily basis "welcome to Tijuana!"...you have to keep your phone roaming off!

 

This mans pockets are so deep..there's nothing that would take him down in my humble opinion!



#8 cat1092

cat1092

    Bleeping Cat


  • BC Advisor
  • 7,001 posts
  • ONLINE
  •  
  • Gender:Male
  • Location:North Carolina, USA
  • Local time:06:53 PM

Posted 04 March 2015 - 03:57 AM

The only thing about that quote is that the Lifeline consumers doesn't have a large amount of data to work with, it's usually 250 minutes & 250 texts per month. Not sure about Data, but my guess is that if there's any, it's a small amount, and that is deducted from the monthly minutes. 

 

TracFone is the owner of other providers whom does business in the US under different names though, such as Straight Talk, which has a $45 unlimited plan, and Net10, which has various unlimited plans for different needs. Those are the ones getting throttled, the ones that Animal mentioned in the OP. I have a TracFone that's just used for calling, have to add a minute card every three months, which is the best deal for me, and I never run out of minutes. 

 

Chances are, the owner is going to take this as a tax write off, in the US, it may not be possible to write off fines as a cost of business, but in Mexico, being he's the richest man there, he'll not lose a night's sleep over it. As for the free Lifeline cell phones, none of the major carriers will want to touch such a contract, so it's not like there's several suitors willing (or able) to pickup the slack. 

 

It's just that TracFone customers will now hopefully get what they're paying for. Look like NET10's pricing has increased as of the last ad I just looked over, so they'll recoup the money over time. Thing is, some consumers won't have a choice, because of credit issues, the larger cell companies will turn them down. So they're going nowhere. 

 

Cat


Performing full disc images weekly and keeping important data off of the 'C' drive as generated can be the best defence against Malware/Ransomware attacks, as well as a wide range of other issues. 





0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users