Attorney General Schwalb Announces $10.25 Million Settlement With AT&T, Verizon, T-Mobile, Cricket & Tracfone Over Deceptive Advertising Practices

50-Jurisdiction Settlement Requires Nation’s Largest Wireless Carriers to Reform Practices and Pay $197K to DC

WASHINGTON, DC – Attorney General Brian L. Schwalb today announced a $10.25 million 50-jurisdiction settlement with the nation’s largest wireless carriers, AT&T Mobility, LLC (AT&T), Cellco Partnership (doing business as Verizon Wireless), Cricket Wireless, LLC (Cricket), T-Mobile USA, Inc. (T-Mobile), and TracFone Wireless, Inc. (TracFone). This settlement resolves an investigation by the state attorneys general into wireless carriers’ deceptive advertising practices, including misleading marketing of “unlimited data” and “free” devices and misrepresentations about fees and contracts.

Under the terms of the settlement, the carriers are required to change their advertising practices and must pay 50 jurisdictions, including $197,606.37 to the District of Columbia.

“It is illegal for companies to mislead or deceive District consumers about their products, services, deals, or promotions,” said Attorney General Schwalb. “These consumer protections are especially important when it comes to products we depend on every day, like our phones and our wireless service. This nationwide bi-partisan settlement makes clear that deceptive marketing practices will not be tolerated and builds on our longstanding efforts to protect consumers and level the playing field for law-abiding businesses.” 

This settlement resolves an investigation by 50 attorneys general into the wireless carriers’ use of misleading advertising practices, including: (1) “unlimited” data advertisements, which failed to properly disclose limitations; (2) offers of “free” phones, which failed to clearly disclose conditions; (3) offers of monetary incentives to switch wireless networks, which failed to clearly and conspicuously disclose how the incentives would be provided; and (4) misleading wireless carrier plan comparisons, which failed to disclose material differences between plans.

Under the terms of the settlement, wireless carriers are required to change their practices and make all future advertisements and marketing truthful, accurate, and non-misleading. They must:

  • Stop misleadingly advertising “unlimited data”: Wireless carriers must refer in marketing materials to “unlimited” mobile data plans only where such plans do not set any numerical limits on the quantity of data allowed during a billing cycle. They must also clearly and conspicuously disclose any restrictions on data speed, as well as the triggers of such restrictions.
     
  • Stop deceptively offering “free” devices or services: Wireless carriers may offer wireless devices or services for “free” or similar terms only where they disclose clearly and conspicuously all material terms and conditions that the consumer must meet in order to receive the “free” devices or services.
     
  • Clearly disclose rules or conditions around offers to pay for consumers to “switch” carriers: Wireless carriers may offer to pay for consumers to “switch” only where they clearly and conspicuously disclose the type of fees and amounts that they will pay consumers, how and when consumers will be paid, and all requirements that consumers must satisfy in order to qualify and receive such payment.
     
  • Stop making misleading claims about saving consumers money: Wireless carriers can only make representations that a consumer will save money by purchasing their products or services where they have a reasonable basis to do so based on comparisons with the prices of comparable goods or services of other providers, or where differences between those goods or services are clearly and conspicuously disclosed.
     
  • Make it clear to consumers when they are leasing devices rather than purchasing them: Carriers must make offers to lease wireless devices only where it is made clear to the consumer that the consumer will be entering into a lease agreement.
     
  • Pay $10.25 million: The carriers must make payments to each of the 50 jurisdictions, including $197,606.37 to DC.

Each company must also appoint a dedicated employee to work with the attorneys general to address complaints filed by consumers, and they must train their customer service workers to comply with these terms.

DC’s agreement with AT&T and Cricket is available here.  

DC’s agreement with T-Mobile is available here.  

DC’s agreement with Verizon and TracFone is available here.  

This matter was handled for the District by Gary Tan, Assistant Attorney General, and Adam Teitelbaum, Director of the Office of Consumer Protection.