For AT&T Customers, a Costly Divorce

November 3rd, 2014

AT&T early termination fee screenshot

Caught in a relationship in which they felt cheated, AT&T smartphone customers whose unlimited data plans were compromised sought a way out. The divorce proved costly.

Victims in a so-called “throttling program” — wherein AT&T deliberately slowed the data speeds of its unlimited data-plan customers — had to pay hundreds of dollars in early termination fees to cancel their contracts if they wanted to leave AT&T after finding out about the speed restrictions.

That’s according to an FTC lawsuit filed against the wireless carrier last week. It states:

Defendant (AT&T) requires most customers with an unlimited mobile data plan, when purchasing a new smartphone, to enter into a contract with a long-term service commitment (typically lasting two years) in which customers who cancel service before the end of the service commitment must pay an early termination fee (“ETF”), typically in the hundreds of dollars.

That policy is boiled down in the screenshot marked in red above. As you can see, the early termination fees are steep indeed.

The FTC lawsuit alleges that AT&T failed to adequately disclose the potential data speed restrictions tied to the throttling program, which the agency said hindered the ability of more than 3.5 million smartphone users to search the web, use GPS navigation and watch streaming video, among other applications. AT&T has called the allegations “baseless.”

Regardless of where the lawsuit goes, consumers should take this a reminder to know what they’re getting into before signing on the dotted line of any smartphone plan.

Click here for more Terms of Surrender posts. And let us know if you think you’ve spotted a potential candidate for next time.

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