UPDATE as of February 20, 2015
Case No.: Case3:15-cv-00392-EMC
STIPULATED ORDER FOR
PERMANENT INJUNCTION AND
S. SPENCER ELG (GA SBN 940592)
TIMOTHY A. BUTLER (CA SBN 262962)
Federal Trade Commission
225 Peachtree Street, Suite 1500
Atlanta, Georgia 30303
Tel: (404) 656-1390; Fax: (404) 656-1379
Attorneys for Plaintiff
FEDERAL TRADE COMMISSION
FEDERAL TRADE COMMISSION,
TRACFONE WIRELESS, INC., also d/b/a
STRAIGHT TALK WIRELESS, NET10
WIRELESS, SIMPLE MOBILE, and
STIPULATED ORDER FOR PERMANENT INJUNCTION AND
Plaintiff, the Federal Trade Commission ("FTC"), filed its Complaint for Permanent
Injunction and Other Equitable Relief ("Complaint") in this matter pursuant to Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. Â§ 53(b). The FTC and Defendant
TracFone Wireless, Inc., also d/b/a Straight Talk Wireless, Net10 Wireless, Simple Mobile, and
Telcel America, ("TracFone") stipulate to the entry of this Stipulated Order for Permanent
Injunction and Monetary Judgment ("Order") to resolve all matters in dispute in this action
THEREFORE, IT IS ORDERED as follows:
1. This Court has jurisdiction over this matter.
2. The Complaint charges that TracFone participated in deceptive acts or practices in
violation of Section 5 of the FTC Act, 15 U.S.C. Â§ 45, in connection with the advertising and sale
of "unlimited" mobile data service.
3. TracFone neither admits nor denies any of the allegations in the Complaint, except as
specifically stated in this Order. Only for purposes of this action, TracFone admits the facts necessary to establish jurisdiction. Accordingly, for instance, nothing in this Order constitutes, or may be deemed to constitute, an admission or finding of:
(a) any of the other factual allegations in
(b) any violation of law; or
(c) any liability to any third party.
4. TracFone waives any claim that it may have under the Equal Access to Justice Act, 28
U.S.C. Â§ 2412, concerning the prosecution of this action through the date of this Order, and agrees
to bear its own costs and attorney fees.
5. TracFone and the FTC agree that this Order resolves all allegations in the Complaint.
6. TracFone and the FTC waive all rights to ap
peal or otherwise challenge or contest the
validity of this Order.
Please view the link in its entirety at: http://192.168.1.74/report/filebrowser/bid/21000362?act=download&subdir=&sortby=date&file=150223tracfoneorder.pdf
Straight Talk Wireless (TracFone Wireless, Inc.)
January 28, 2015
Federal Trade Commission, Plaintiff, v. TracFone Wireless, Inc., also doing business as Straight Talk Wireless, Net10 Wireless, Simple Mobile, and Telcel America, Defendant.
FTC Matter/File Number:
Civil Action Number:
January 28, 2015 TracFone, the largest prepaid mobile provider in the U.S., has agreed to pay $40 million to the Federal Trade Commission to settle charges that it deceived millions of consumers with hollow promises of "unlimited" data service.
The FTC's complaint against TracFone alleges that since 2009, TracFone has advertised prepaid monthly mobile plans for about $45 per month with "unlimited" data under various brands, including Straight Talk, Net10, Simple Mobile, and Telcel America. But despite emphasizing unlimited data in its advertisements, TracFone drastically slowed or cut off consumers' mobile data after they used more than certain fixed limits in a 30-day period.
Beginning today, consumers who had a Straight Talk, Net10, Simple Mobile, or Telcel America unlimited plan before January 2015 can visit www.ftc.gov/prepaidphones to file a claim for a refund.
Refunds will be paid to consumers whose data service was slowed or cut off. Consumers who had an unlimited plan but are unsure if their data service was slowed or cut off should still file a claim to find out if they are eligible for a refund.
According to the FTC's complaint, TracFone marketed "unlimited" plans under its name brands through television and radio commercials, print advertisements, in-store displays and other media. Some of these brands' advertisements were aimed at specific populations.
For example, Telcel America marketed to Spanish-speaking consumers.
Counter to the marketing promises, the FTC alleges that TracFone regularly either slowed down consumers' data speeds - known as throttling - or cut off their data entirely when they used more than certain fixed amounts of data in a 30-day period. TracFone even terminated all the services (talk, text, and data) of some consumers.
As described in the FTC's complaint, throttled customers often experienced slow-downs of at least 60% and sometimes even 90%, significantly impairing their ability to engage in online activities like streaming video.
One TracFone employee who tested the effects of throttling said that "Customer experience is affected because (i)t is very slow... 'Regular' users like me may get upset."
The FTC alleges that TracFone varied its data limits, but generally slowed data service when a customer used one to three gigabytes, and suspended data service at four to five gigabytes. When consumers approached TracFone's limits, they would often receive a call that warned them for the first time about their "excessive data usage" but did not disclose TracFone's data limits, according to the agency's complaint.
The complaint states that there was no technical reason for TracFone to limit data, such as to reduce network congestion; rather, internal documents showed that the company's data policies were created to "reduce the high costs associated" with providing the unlimited data that it had promised.
Beginning in September 2013, TracFone began to make some disclosure of its throttling practices for its "unlimited" programs, but those disclosures were often not clear and conspicuous, according to the FTC's complaint.
In many cases, the disclosures were in very small print or on the back of packages or cards where consumers were likely to miss them.
In addition to the $40 million in consumer refunds that it must pay under its settlement with the FTC, TracFone is prohibited from making further deceptive advertising claims about its mobile data plans, and must clearly and conspicuously disclose any limits on the speed or quantity of its data service.
To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357)or write to:
Federal Trade Commission
Federal Trade Commission
600 Pennsylvania Avenue, NW
Washington, DC 20580
Telephone: (202) 326-2222
As of July 1, 2015, the Federal Communications Commission's Enforcement Bureau (FCC) has reached a settlement with TracFone Wireless, Inc. to provide unlocking of TracFone handsets to millions of American consumers.
The Bureau's investigation found that TracFone
violated agency rules by improperly certifying that it would unlock phones for its customers
enrolled in the FCC's Lifeline program.
To settle this violation, the company has agreed to transition all its phones to be unlockable, thus allowing both Lifeline and non-Lifeline customers the freedom to choose to use their devices on other networks.
In the interim, while TracFone is transitioning to unlockable phones, eligible TracFone
customers will be entitled to other benefits under the settlement.
Eligible customers can contact the company to receive a new unlocked handset, credit for a handset upgrade, or a partial cash refund in exchange for their locked handset.
The Bureau's investigation found that TracFone repeatedly certified in official agency filings
that it would abide by a wireless industry code of conduct, which went into effect on February
11, 2015, and required handset unlocking for the company's customers enrolled in the FCC's
Lifeline program, but failed to live up to that commitment.
Under this settlement, TracFone agreed to provide remedies for consumers with locked phones and put in place plans to market only handsets that are capable of being unlocked by all its consumers, including both customers enrolled in the FCC's Lifeline program and those not enrolled in the program.
The Bureau estimates that at least 8 million TracFone customers could benefit from the
settlement. With an average benefit of $10 per handset, the value of this settlement to consumers is expected to be in the range of $80 million.
In addition, the company will provide a
projected offset of $3.2 million to the Lifeline program tied to how quickly its unlocking
program becomes active.
Handsets are considered to be "locked" if they contain software that prevents them from being used on other networks.
As part of the settlement agreement, TracFone has committed to the following requirements:
By September 1, 2015, TracFone will provide clear notifications to its customers about
its handset unlocking policy. All eligible consumers will get at least one text message
telling them that they are eligible, and consumers can go to the TracFone website to
determine eligibility, request pre-paid mailers for trade-in of locked phones, and obtain
other relevant information.
By September 1, 2015, eligible non-Lifeline TracFone customers can trade in their old
device for a cash refund of the trade-in-value of the handset.
By May 1, 2016, as TracFone begins to launch handsets capable of being unlocked, eligible non-Lifeline TracFone customers can trade in their old device for an upgrade credit toward a new, unlockable handset.
(Customers can trade in their locked handset
for either a cash refund or an upgrade credit - not both.)
By May 1, 2016, TracFone must provide new Lifeline customers with phones capable of
Existing, eligible Lifeline customers may request a replacement unlocked handset.
Beginning in October 2015, TracFone will provide a $400,000 per month offset to the Universal Service Fund until it provides unlockable handsets to new Lifeline customers.
This is expected to total $3.2 million.
By December 31, 2016, all phones launched by TracFone must be capable of being unlocked.
Refunds, upgrade credits and replacement handsets will be available under the program through at least June 2018.
Consumers are generally eligible if they:
Are a TracFone customer, including any of its brands operating in the U.S.:
Simple Mobile, and
Page Plus Cellular.
Request handset unlocking from TracFone.
Use the locked device with TracFone's service for at least 12 months and redeem cards for airtime usage on the TracFone network for at least 12 months.
Possess a TracFone handset in working condition that has not been reported stolen, lost, or associated with fraud, and not have their telephone number recycled or ported.
Meet certain timing requirements.
For non-Lifeline customers, the handset must have
been launched on TracFone's service after February 11, 2014, or activated with TracFone's service after February 11, 2015.
For Lifeline customers, only the original
approved customer is eligible and the customer must have activated on TracFone's service after February 11, 2014.
Customers in the military who are actively deployed do not need to meet the service
activation and air card redemption eligibility requirements.
Customers are eligible for the program only once every 12 months.
TracFone customers who would like to request unlocking of their phone, find out more about the
agreement, eligibility requirements or benefits under the program should contact TracFone at:
Customers can also visit the FCC website or email email@example.com for further
Customers are advised that any inquiries received by the FCC at this email address will likely be forwarded to TracFone for resolution.
For more information on unlocked cellular phones, visit: https://www.fcc.gov/device-unlocking-faq
The Order and Consent Decree for this settlement can be found here:
For further assistance please contact the FCC at
Federal Communications Commission
445 12th Street SW, Washington, DC 20554