AT&T faces FTC lawsuit for reducing data speeds on customers with unlimited data smartphone plans

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by Eric Pearson

The Federal Trade Commission has filed a federal lawsuit against AT&T alleging the company has misled millions of smartphone customers by promising “unlimited” data plans while reducing their data speeds, in some cases by almost 90 percent. The FTC says that AT&T has received thousands of complaints about the slow data speeds under the throttling program.

The FTC alleges that AT&T failed to adequately disclose to customers on unlimited data plans that, once they reach a certain amount of data use in a billing cycle, AT&T then reduces – or “throttles” – their data speeds to the point that many common mobile phone applications become difficult or nearly impossible to use. Under AT&T’s “throttling program, if an unlimited mobile data plan customer exceeds the limit set by [AT&T] during a billing cycle, [AT&T] substantially reduces the speed at which the customer’s device receives data for the rest of that customer’s billing cycle,” alleges the FTC.

The FTC alleges that AT&T began throttling data speeds in 2011 for unlimited data plan customers after they used as little as 2 gigabytes of data in a billing period. The throttling often resulted in speed reductions of 80 to 90 percent for affected users. Such throttling can dramatically impact the ability to use web browsing, GPS navigation, streaming video and more. AT&T has throttled at least 3.5 million unique customers a total of more than 25 million times, according to the FTC. “When a customer is throttled, the customer’s data speed is reduced, on average, for the last twelve days of the customer’s thirty- day billing cycle,” according to the complaint.

AT&T advertising emphasized the “unlimited” amount of data that would be available to consumers who signed up for its unlimited plans, according to the FTC complaint. AT&T then failed to inform its customers of the throttling program, alleges the FTC. The lawsuit alleges that AT&T violated federal law by changing the terms of customers’ unlimited data plans while those customers were still under contract, and by failing to adequately disclose the nature of the throttling program to consumers who renewed their unlimited data plans.

Heygood, Orr & Pearson fights for consumers

The attorneys at Heygood, Orr & Pearson are willing to stand up for consumers who have been defrauded and to help guide them through the challenging and expensive world of class action, multi-district, and complex consumer fraud litigation. Our attorneys have represented clients across the country against multimillion-dollar companies, making sure that when consumers are hurt by corporate wrongdoing, the companies that do so are held accountable for their actions.

A class action lawsuit is a lawsuit brought by a group of people who have suffered similar harm from similar actions of a particular defendant. The lawsuit is filed is by one or sometimes more “class representatives” who ask the court for permission to represent the interests of a group of people who were treated and injured in much the same way. Of course, there is a great difference to the corporation being sued between paying damages to a few victims and paying damages to every victim. Not surprisingly, corporations fight hard to defend themselves against class actions.

We have represented numerous plaintiffs in consumer fraud and consumer class action lawsuits. For example, we have represented dozens of consumers who claim they were defrauded into investing in life settlements as well as individuals who allege they were misled by claims made by Samsung regarding the memory capacity of its Galaxy S4 phone. The suit we filed in California on behalf of a class of Galaxy S4 owners alleged that Samsung advertised the smartphone as having significantly more storage capacity than what was actually available on the device.

Heygood, Orr & Pearson are also very comfortable and experienced with the complex and challenging world of “multidistrict litigation” or “MDL.” MDL refers to a special legal procedure designed to speed the process of handling a large number of lawsuits with overlapping claims. For example, numerous separate lawsuits involving allegations of undisclosed bladder cancer risks with the drug Actos have been joined together in a federal court MDL. The cases will share a pre-trial discovery process (to exchange information and develop evidence for trial) but will be heard individually, with potentially different results. In contrast, all parties in a class action lawsuit are subject to a common decision.

Heygood, Orr & Pearson is using its extensive experience litigating defective pharmaceutical and medical device lawsuits in pursuing Actos cases on behalf of clients. As another example of an MDL, Michael Heygood and other lawyers at Heygood, Orr & Pearson were designated “Lead Plaintiffs’ Counsel” last year by the federal court that presided over numerous wrongful death lawsuits regarding the Watson fentanyl patch that were consolidated for pretrial purposes in MDL No. 2372 — In re: Watson Fentanyl Patch Products Liability Litigation, before the United States District Court for the Northern District of Illinois.

To be successful in complex litigation such as a class action or MDL proceeding, clients need educated, experienced attorneys like those at Heygood, Orr & Pearson. We have the experience and knowledge to guide our clients through class action litigation from beginning to end. And we have the financial resources to help them stand toe-to-toe with some of the biggest corporations in the world through what is often a lengthy, complicated and expensive process.

Heygood, Orr & Pearson is AV-rated, the highest rating available from Martindale-Hubble, the top law firm rating service. Our partners Michael Heygood, Jim Orr, and Eric Pearson are all Board Certified in Personal Injury Trial Law by the Texas Board of Legal Specialization and have all been voted by their peers as “Super Lawyers” in the state of Texas for several consecutive years.*

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