$10.25 Million Settlement with Major Wireless Carriers for Deceptive Advertising

Iowa's Attorney General Bird Announces


(SBA) - DES MOINES—Iowa Attorney General Brenna Bird today announced a $10.25 million settlement with AT&T Mobility, Cricket Wireless, T-Mobile USA., Cellco Partnership, Verizon Wireless, and TracFone Wireless. This settlement closes investigations by 47 attorney general offices into the phone companies’ deceptive advertising practices.

“Phone companies have a duty to connect Iowans with the truth,” said Attorney General Bird. “This settlement will hold phone companies accountable and ensure Iowans have the information they need to pick the best phone plan for themselves and their families.”

The investigation was prompted by consumer complaints about the phone companies alleging misleading advertising practices including: 

  • “Unlimited” Data Plans: Failing to clarify limits on data usage and effects on data speed. 
  • “Free” Phone Offers: Not revealing all conditions required to qualify for the free phone. 
  • Incentives for “Switching” Networks: Misrepresenting how benefits would be provided for switching networks. 
  • Wireless Carrier Plan Comparisons: Leaving out key differences between plans.

The settlement requires the phone carriers to:

  • Provide Truthful and Accurate Advertising.
  • Clearly Define “Unlimited” Data Plans: “Unlimited” data plans can only be advertised if there are no data quantity limits. Restrictions on data speed and triggers must be clearly disclosed.
  • Increase Transparency for Switching Providers: Companies offering to pay for clients to switch to their network must disclose the type, amount, and timeline for fees clients will be charged. Qualification requirements must also be disclosed.
  • Clarify Conditions of “Free” Offers: All terms and conditions required to receive a “free” device or service must be clearly explained.
  • Notify of Leases: Iowans must be made aware when they are entering into an agreement to lease, rather than buy, a wireless device.
  • Substantiate Savings Claims: Claims of saving money must be based on reasonable comparisons with competitors. Material differences in service must be disclosed.
  • Assist with Consumer Complaints: Each company must appoint a dedicated employee to work with attorneys general to address consumer complaints.
  • Customer Service Training: All customer service representatives must be trained to comply with and enforce the settlement terms.

Iowa will receive $107,041 from the settlement. Iowa’s share of the settlement was largely determined by population.

Read the full settlement with AT&T Mobility and Cricket Wireless here.

Read the full settlement with T-Mobile USA here.

Read the full settlement agreement with Cellco Partnership, Verizon Wireless, and TracFone Wireless here.