HARRISBURG, PA — Attorney General Michelle Henry announced Thursday a landmark $10.25 million settlement with several of the nation’s leading mobile device service carriers over allegations of deceptive advertising practices. The agreement, encompassing 50 jurisdictions, addresses claims that AT&T, Verizon Wireless, Cricket, and T-Mobile misled consumers with promises of “unlimited” data plans and “free” phones that were, in reality, laden with hidden costs and conditions.
Under the terms of the settlement, these mobile carriers are now mandated to ensure all future advertising is truthful, detailing any fees and conditions upfront and providing comprehensive training to customer service teams to uphold these standards. Pennsylvania, a key participant in the multi-jurisdictional effort, will receive over $260,000 in costs and fees.
Attorney General Henry highlighted the critical nature of the settlement, noting the essential role mobile devices play in modern life and the consequent need for consumers to have access to transparent and reliable information. “For far too long, these major carriers have been advertising free devices that actually involve significant costs for the consumer,” she stated, underscoring the importance of honesty in marketing mobile services and devices.
The settlement specifically targets misleading practices related to advertisements for “unlimited” data plans, “free” phone offers, incentives for switching wireless networks, and comparisons of wireless carrier plans. The allegations pointed to a failure by the carriers to adequately disclose the limitations and conditions of these offers, essentially leaving consumers in the dark about the true nature of the deals they were signing up for.
To rectify these issues, the Assurance of Voluntary Compliance requires the carriers to:
- Ensure all advertisements are honest and clear, avoiding any misleading representations.
- Only refer to data plans as “unlimited” when no numerical data limits exist, while clearly disclosing any data speed restrictions.
- Clearly outline the specifics when offering to cover costs for consumers switching carriers, including the types of fees covered and the payment schedule.
- Disclose all conditions tied to “free” offers to prevent future consumer misinterpretation.
- Clarify that consumers entering into a deal are agreeing to a lease arrangement for device offers.
- Base any savings claims on reasonable comparisons with equivalent services or products of competitors, highlighting any significant differences.
- Designate an employee to liaise with attorneys general to resolve consumer complaints and ensure customer service representatives are trained to comply with the settlement’s terms.
This resolution marks a significant step towards greater transparency in the mobile communications industry, aiming to protect consumers from misleading advertisements and ensuring they make informed decisions in a market that is integral to everyday life. The commitment by these carriers to overhaul their advertising practices reflects a broader move towards accountability and consumer protection in the digital age.
Click here to view the states’ agreement with AT&T Mobility, LLC and Cricket Wireless, LLC.
Click here to view the states’ agreement with T-Mobile USA, Inc.
Click here to view the states’ agreement with Cellco Partnership, d/b/a Verizon Wireless, and TracFone Wireless, Inc.
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