Imagine if you saw a restaurant that advertised that they had an “All you can eat buffet.” If you were really hungry, you may believe that would be a good deal, and you rushed in and paid for your dinner.
But what if they “forgot” to inform you that after your first plate of food, you would be required to eat from a thimble sized plate? Sure, you could still eat as much as you liked, but at a teaspoon of food per serving, you would likely become so frustrated that you simply give up and leave.
That is what one cellphone, in essence, attempted. TracFone sold plans to consumers with “unlimited” prepaid data. A great sales tool, and likely but there was a catch. The plans purchased prior to September 2013 often failed to contain any mention of their practice of “throttling” or suspending service if the consumer exceeded fixed limits in a 30-day period.
And when they did, they buried it within the “terms and conditions” that rendered them unlikely to be read by anyone. Like many “disclosure documents,” they seem little more than a modern equivalent of a carney game of hiding the pea under a walnut shell.
Unsurprisingly, many of those consumers who bought the phones were annoyed and felt cheated after suffering this type of consumer fraud.
This type of case is a classic type of scenario where a class action is necessary, because no individual phone user could afford to hire an attorney to sue the company for fraud. The situation also attracted the attention of the Federal Trade Commission (FTC).
The FTC reached a proposed settlement that will pay $40 million to the purchasers of these phones for TracFone’s deceptive marketing scheme.
Consumerist.com, “TracFone To Refund $40 Million To Customers For Deceptive “Unlimited” Data Claims,” Chris Morgan, January 28, 2015