FTC TracFone Class Action Settlement

On Jan. 28, a settlement was reached in the FTC TracFone lawsuit, meaning TracFone Wireless Inc. will pay $40 million to their consumers to resolve claims that the company falsely promoted their “unlimited” data plans only to allegedly slash data transfer speeds when customers had exceeded certain data limits.

The Federal Trade Commission (FTC) filed this lawsuit against TracFone for allegedly misleading consumers about the exact nature of the advertised $45 per month TracFone unlimited data plans offered by various TracFone brands, which include Straight Talk, Net10, Simple Mobile, and Telcel America. According to the FTC TracFone lawsuit, the company would allow consumers to purchase the “unlimited” data plan, but later reduce or completely cut off the mobile data plan when a consumer exceeded fixed data limits during a 30 day period. This business practice is known as “throttling.”

The FTC TracFone lawsuit alleges that until 2013, consumers were unware of TracFone’s data “throttling” practice, but even that disclosure was hidden among TracFone fine print or even on the backside of a TracFone mobile phone’s packaging — places that made it unlikely a consumer would see the data throttling disclosure.

The FTC further alleges that TracFone and its participating brands have employed this data throttling practice since 2009 and would reportedly reduce a consumers mobile phone service anywhere from 60 to 90 percent. The data throttling usually began to occur when a TracFone customer used one to three gigabytes of data. If a customer used four or five gigabytes, the company would allegedly suspend the data services. When a consumer directly complained to TracFone about the throttling practice, they were finally warned about the consequences of “excessive data usage” by a TracFone prerecorded message.

This is not the first time the FTC has gone after a phone provider for unfair and misleading data plans. In October of last year, the FTC sued AT&T for similar alleged throttling data practices, which the company failed to properly disclose to its consumers. This case was later settled, with AT&T paying $105 million to consumers.

This FTC lawsuit is also not the first time TracFone has been sued for false advertising regarding its unlimited data plan. In 2013, a throttling class action lawsuit was filed against Wal-Mart and TracFone for falsely advertising Straight Talk cellphone plans as “unlimited,” when in fact the company would reduce or terminate an user’s mobile plan if they went over certain data limits. This TracFone class action lawsuit demonstrates the FTC’s claim that the company has been employing their data “throttling” strategy since 2009.

In the recent FTC TracFone lawsuit and subsequent refund agreement, the agency claims that there exists company internal documents demonstrating that the data throttling practices served no technical purpose, like reducing network data congestion; rather, TracFone employed throttling in order cut the cost of providing unlimited mobile data services.

Who’s Eligible

You are considered eligible for an FTC TracFone refund if you purchased a Straight Talk, Net10, Simple Mobile or Telcel America wireless service plan that was advertised to include “unlimited” data within the U.S. between July 24, 2009, and Dec. 31, 2014, and you had your data usage slowed, suspended, or had all phone services terminated by TracFone before your service plans’ expiration date.

Potential Award

Varies

Your refund FTC TracFone Refund payment will depend on three factors:

1. How many eligible consumers file claims,
2. When you were a customer, and
3. How your cell phone service was affected.

Proof of Purchase

Download and mail a complete Claim Form to the FTC TracFone settlement administrator or complete and submit a Claim Form online.

Claim Form

Claim Form Deadline

6/19/2015

Case Name

Federal Trade Commission v. Tracfone Wireless Inc., Case No. 3:15-cv-00392, in the U.S. District Court for the Northern District of California.

Final Hearing

N/A

Settlement Website

www.PrepaidPhoneRefund.com

Claims Administrator

Prepaid Phone Refund
Settlement Administrator
PO Box 2011
Chanhassen, MN 55317-2011
1 (855) 312-3327

Class Counsel

LIEFF CABRASER HEIMANN & BERNSTEIN LLP
HATTIS LAW

Defense Counsel

CARLTON FIELDS
SIDLEY AUSTIN LLP

UPDATE: The TracFone class action settlement received final approval on July 2, 2015.

UPDATE 2: According to the settlement administrator, the Tracfone class action settlement will become effective on Aug. 1, 2015 and checks will be mailed by Oct. 20, 2015.

UPDATE 3: Settlement checks were mailed out to Class Members starting on Mar. 22, 2016 through Mar. 29, 2016. According to the settlement administrator, Class Members must cash their refund checks no later than July 20, 2016.

UPDATE 4: On Mar. 26, 2016, Top Class Actions readers have started receiving settlement checks! If you filed a claim for the TracFone “unlimited” data class action settlement, keep an eye on your mailbox because checks are on the way!