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Major Wireless Carriers Settle for $10 Million Over Misleading Ad Practices
AT&T, Verizon, and T-Mobile to overhaul marketing strategies after nationwide settlement.
NEWARK, N.J. – Attorney General Matthew J. Platkin, alongside the Division of Consumer Affairs and 50 other state attorneys general, has secured a $10.25 million settlement with the nation's largest wireless providers—AT&T, Verizon, and T-Mobile. This resolution concludes an investigation into allegedly deceptive advertising and sales tactics employed by these companies.
“Wireless carriers have every right to compete for customers on price and features, but they don’t have the right to ensnare consumers with misleading advertisements and offers that hide or misrepresent the true cost of cell phone service,” said Attorney General Platkin.
The agreement, known as the Assurance of Voluntary Compliance (AVC), mandates that these carriers reform their marketing approaches to ensure transparency and honesty when selling wireless services.
“New Jersey consumers are entitled to clear and accurate information in the marketplace,” said Cari Fais, Acting Director of the Division of Consumer Affairs. “This settlement requires cell phone companies to be transparent in their advertising and marketing, and sends the message that misleading business tactics will not be tolerated.”
The investigation highlighted several practices deemed misleading under consumer protection laws, such as advertisements that failed to adequately disclose terms related to "unlimited" data, "free" phone offers, and monetary incentives for switching providers.
Key provisions of the AVC require the companies to:
- Clearly outline any payment, credit, or reimbursement terms for consumers switching carriers, including the payment form and timing.
- Ensure all advertisements are truthful, accurate, and non-misleading.
- Explicitly disclose any limitations on data speed and other restrictions within "unlimited" data plans.
- Avoid implying that capped data plans offer "unlimited" data.
- Clearly state all conditions for obtaining a "free" device, including any related fees and lease requirements.
- Prohibit misleading comparisons with other carriers in terms of pricing or savings.
Additionally, each company will contribute to the settlement amount, with Verizon and T-Mobile each paying just over $4 million, and AT&T paying approximately $2 million. New Jersey's portion of the settlement totals $202,337.40, which will support future consumer protection efforts, including enforcement and education.
Deputy Attorney General Jeffrey Koziar and Section Chief Jesse J. Sierant of the Consumer Fraud Prosecution Section represented New Jersey in these proceedings. This settlement marks a significant commitment to enhancing transparency in the wireless industry and safeguarding consumer interests.
