Good thing the Federal Trade Commission is acting, because forced arbitration prevents consumers from effectively fighting for themselves.
Have you been “throttled” by AT&T?
According to the Federal Trade Commission, since 2011 it’s happened more than 25 million times, affecting 3.5 million customers.
Throttling refers to slowing down your internet connection when you use more data than your provider wants you to use, whether for email, streaming video or anything else.
The FTC alleges AT&T throttled customers who pay $30 a month for data plans that AT&T calls unlimited – in some cases slowing their internet speeds by up to 90 percent. AT&T says it told its customers they could be throttled. The company says it put notices in bills (and who doesn’t read every word of their cell phone bill)? They also claim to have sent emails and text messages to customers on the verge of being throttled. But, according to The New York Times:
While AT&T said that customers were notified by text message before the program was put into effect, the commission said that “most unlimited mobile data plan customers have never been sent a text message or email” about it.
And, as The Washington Post reports:
The FTC found in its investigation that AT&T was aware that consumers saw throttling as inconsistent with promises of “unlimited” data. When the company explained the concept to focus groups, the FTC reported in its suit, customers grew upset. The company’s own researchers then urged AT&T’s marketers that “saying less is more” when it comes to selling such services. …
“AT&T promised its customers ‘unlimited’ data, and in many instances, it has failed to deliver on that promise,” said [FTC chairwoman Edith] Ramirez in a statement. “The issue here is simple: ‘unlimited’ means unlimited.”
And, the Post reports, this is not the first time AT&T has come under scrutiny from the FTC. In addition to “throttling,” the company also has been accused of “cramming” :
AT&T is also paying $105 million to settle charges from this month that it loaded consumers’ wireless bills with bogus third-party fees without their consent. Those fees, according to the FTC and the [Federal Communications Commission], added “hundreds of millions of dollars” to AT&T’s bottom line over a five-year period and misled customers into thinking that they were being charged for AT&T’s own services.
Since becoming FTC chairwoman a year ago, Ramirez has won high marks from consumer advocates. But the rights of consumers should not be dependent on who happens to be running a government agency – when an agency has the power to act at all. Consumers should be able to band together and fight for their rights in court.
But when it comes to AT&T, they can’t. That’s because AT&T has something else in the fine print, along with the notice about throttling: AT&T has a forced arbitration clause – the kind of clause we take on in our 20-minute documentary Lost in the Fine Print.
Indeed, AT&T has a notorious place in the annals of forced arbitration. When customers were charged more than $30.00 each for phones AT&T said would be free, they tried to band together to sue the company. AT&T appealed all the way to the Supreme Court. In a decision written by Justice Antonin Scalia, the five-member conservative majority ruled that AT&Ts forced arbitration clause shut the customers out of court.
So now that AT&T is at it again, victims of throttling can’t come together to stand up for their rights in court. Instead they have to go one at a time to an arbitrator essentially chosen by AT&T, or they can go, again one at a time, to small claims court. One person actually did that. It took a lot of time and effort. And though he got a refund on part of his bill, even then he couldn’t stop AT&T from continuing to throttle him.
The other 3,499,999 customers allegedly throttled by AT&T shouldn’t have to do the same in order to get justice.
So please go to www.lostinthefineprint.org and click on the “Take Action” link. It will take you to a page where you can demand that AT&T – and other companies you deal with that use forced arbitration – remove those clauses from their terms of service.
Watch this story about AT&T and throttling from NBC Nightly News: