Why Aren't More Companies Sued For Bogus 'Unlimited' Service Claims?

from the false-advertising dept

Wed, Aug 11th 2010 9:08pm — Mike Masnick

With the news that a lawsuit has been filed against T-Mobile for advertising "unlimited" smartphone data service that's really limited to 10GB, it raises an important question: how come we don't see more lawsuits like this? For years we've pointed out that all these services marketing offerings as "unlimited" when they're really limited certainly must be violating truth in advertising laws -- but for some reason, you almost never hear of any actual lawsuits against these companies. Now, it's probably difficult to show that the difference caused much harm, but you would think that, at the very least, the FTC would step in at some point to point out that calling a limited service "unlimited," is not allowed.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: limited, unlimited
Companies: t-mobile

62 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

AW, 11 Aug 2010 @ 9:19pm

Id guess plain and simple money and cynicism. Who has the money that wants to fight for truth in advertising, these are exactly the types of thing the government is supposed to protect us from, but when our politicians have learned how to advertise from them can we really expect them to be on our side?
[ link to this | view in chronology ]
- jsl4980 (profile), 12 Aug 2010 @ 6:27am
  
  Re:
  The government (FTC to be exact) can't monitor every statement made by every company. They can only investigate what they're aware of. Luckily there is an easy way to alert the FTC to false advertising and deceptive practices here: https://www.ftccomplaintassistant.gov/
  [ link to this | view in chronology ]
Anonymous Coward, 11 Aug 2010 @ 9:22pm

"Why Aren't More Companies Sued For Bogus 'Unlimited' Service Claims?"

Why aren't fewer companies sued for bogus 'unlimited' service claims?
[ link to this | view in chronology ]
- BearGriz72 (profile), 11 Aug 2010 @ 9:25pm
  
  Re:
  Huh? That does not even make sense...
  [ link to this | view in chronology ]
  - Anonymous Coward, 11 Aug 2010 @ 9:30pm
    
    Re: Re:
    Ok, it was kinda a bad joke. Anywho, the reason why more aren't sued is either
    
    A: they provide enough service for the majority of their customers.
    
    B: Lawsuits are expensive and time consuming so unsatisfied customers either tolerate limitations or they switch providers.
    [ link to this | view in chronology ]
    - Anonymous Coward, 11 Aug 2010 @ 9:50pm
      
      Re: Re: Re:
      It's like, if you go to the store and you buy a product and the product doesn't work as advertised, do most people generally sue the company? No, they take the product back.
      [ link to this | view in chronology ]
      - cc (profile), 11 Aug 2010 @ 10:03pm
        
        Re: Re: Re: Re:
        In the case of a service, which is likely degraded after the secret limit is hit, the end user has no way of knowing the reason of the degradation.
        
        If there's a 10GB limit after which the download speed is capped to 1/4, a typical end-user will probably blame YouTube for being slow rather than the ISP for capping it.
        [ link to this | view in chronology ]
        
        Anonymous Coward, 11 Aug 2010 @ 10:26pm
        
        Re: Re: Re: Re: Re:
        Well then that's why they don't sue. Tech savvy users will do a bandwidth check and realize what has happened and they'll probably switch providers. Typical users won't know to sue because they won't know what the problem is.
        [ link to this | view in chronology ]
      - abc gum, 12 Aug 2010 @ 6:03am
        
        Re: Re: Re: Re:
        "It's like, if you go to the store and you buy a product and the product doesn't work as advertised, do most people generally sue the company? No, they take the product back."
        
        Inexpensive crap products at the store typically do not have an ETF and they get thrown in the trash rather than returned in order to save gas.
        [ link to this | view in chronology ]
        
        Anonymous Coward, 12 Aug 2010 @ 8:20am
        
        Re: Re: Re: Re: Re:
        So if most people can't even be bothered to take back a defected product, an action that's much less trouble and costly than initiating a lawsuit, then what makes you think they can be bothered to sue for defected service?
        [ link to this | view in chronology ]
        
        abc gum, 12 Aug 2010 @ 7:01pm
        
        Re: Re: Re: Re: Re: Re:
        "what makes you think they can be bothered to sue for defected service?"
        
        I missed that part where I stated such ... wtf
        [ link to this | view in chronology ]
        
        Anonymous Coward, 12 Aug 2010 @ 7:47pm
        
        Re: Re: Re: Re: Re: Re: Re:
        It was sorta a rhetorical question.
        [ link to this | view in chronology ]
Anonymous Coward, 11 Aug 2010 @ 9:27pm

Because It's Unlimited*
You see, a little star is the marketing person's equivalent of a child's crossed fingers. You can tell any lie you want as long as you use a little star.

*up to 10 GB
[ link to this | view in chronology ]
- abc gum, 12 Aug 2010 @ 6:04am
  
  Re: Because It's Unlimited*
  I thought it was called an ass-trick
  [ link to this | view in chronology ]
Scote, 11 Aug 2010 @ 9:29pm

Darn, I knew I shouldn't have applied for a job at T-Mobile when they promised an "Unlimited" salary with "Unlimited" benefits. =:-o

Letting advertisers slide on unlimited service offers is just inexcusable, literally inexcusable. We wouldn't let it slide in other areas of contract law, so there is no reason to give it a pass in advertisements for consumer goods and services.
[ link to this | view in chronology ]
Anonymous Coward, 11 Aug 2010 @ 9:54pm

Does it have harsh financial punishments that are collectable?
[ link to this | view in chronology ]
Anonymous Coward, 11 Aug 2010 @ 10:14pm

Two days ago...
...Karl Bode did a better job reporting this story.

http://www.dslreports.com/shownews/TMobile-Sued-For-Offering-Limited-Unlimited-Service-109 801
[ link to this | view in chronology ]
- Mike Masnick (profile), 11 Aug 2010 @ 10:51pm
  
  Re: Two days ago...
  ...Karl Bode did a better job reporting this story.
  
  Note the link in the post? It's to Karl's story.
  [ link to this | view in chronology ]
Anonymous Coward, 11 Aug 2010 @ 10:36pm

For two reasons.

1. These are fucking huge companies with a fucking lot of lawyers. No one actually stands a snowball's chance in hell of getting anything done. These are the same lawyers that will hold up anything the FCC tries to do long enough that their lobbyists get some exemption for them put into law.

2. I'm sure that the contract mentions the cap, so although there may be false advertising, they do inform you that there's a cap. Yeah, it's hidden in a contract but if you sign it without reading it then it's really your own damn fault. I mean, if you sign something that says "I read and agree to the conditions" without reading the conditions then you really don't have a great deal of room to complain.

I'd like to see this practice end as much as the next guy, but I'm also not naive enough to think that we can do anything as long as the current situation persists. We have, what, 3 major cell phone service providers in the USA? As long as we allow oligopolies like this to exist in the first place, the market will be run by them, period.
[ link to this | view in chronology ]
- porkster, 11 Aug 2010 @ 11:26pm
  
  Re:
  Reason 3.
  
  3. People are using "unlimited" for downloading movies and don't want that to come up in the lawsuit.
  [ link to this | view in chronology ]
- abc gum, 12 Aug 2010 @ 6:26am
  
  Re:
  "I'm sure that the contract mentions the cap"
  
  So certain are you.
  
  I recall the accounts of those affected where they scoured the paperwork and website looking for the elusive cap amount. Email requests were met with stonewalling. After some time it was acknowledged that there was indeed a cap but they would not quantify.
  
  It is a small step forward if they do actually state the cap amount in the paperwork, but the inclusion of small print statement of cap amount in the paperwork is of little value to the average consumer who sees unlimited in large font.
  
  Then there is the story about the guy who had been paying for the premium package thinking it would get him a larger cap, they never told him specifically what the cap amount was. Upon inquiry about the over cap charges, he was told that the additional BW just gets him to the cap quicker. He then changed his service to lowest package available.
  [ link to this | view in chronology ]
BentFranklin, 11 Aug 2010 @ 10:39pm

I fired Netflix after two months. The first month I got unlimited movies. the next month they throttled me. Goodbye forever Netflix liars.
[ link to this | view in chronology ]
- Rose M. Welch (profile), 12 Aug 2010 @ 3:21pm
  
  Re:
  Really? We exclusively watch Netflix, and have no problems. And I do mean exclusively, as we have a limited DVD selection and fired our cable company. On top of that, there are 5+ people here almost 24 hours per day, 7 days a week. So... Lots of Netflix watching, no problems.
  
  Or are you talking about the physical DVDs?
  [ link to this | view in chronology ]
  - nasch (profile), 12 Aug 2010 @ 3:49pm
    
    Re: Re:
    Probably physical DVDs. They throttle heavy users of the mail service.
    [ link to this | view in chronology ]
ECA (profile), 11 Aug 2010 @ 11:09pm

Did the same with Netflix..had them for 1 year, and the unlimited version was 12 per month ONLY.

I would wish a TRUE MEANING of "FREE"
not..
free IF
free AFTER
free when

FREE should NEVER have a Star or Asterisk AFTER IT.
[ link to this | view in chronology ]
MarksAngel (profile), 11 Aug 2010 @ 11:09pm

I don't why they aren't but I'll tell you who I would like to sue is Skype, they advertise an unlimited plan which actually is limited. Most people won't see the little fine print when they buy but here is there "Fair Usage Policy"

Calls to phones and mobiles and Skype To Go* calls are included in your subscription subject to a fair usage limit of 10,000 minutes per user per month, with a maximum of 6 hours per day.

But the plan says Unlimited calls* to landline phones worldwide. well that's not really unlimited is it.
[ link to this | view in chronology ]
- Anonymous Coward, 8 Sep 2010 @ 7:17pm
  
  Re:
  I filed a FTC complaint and reversed all monies paid to Skype from my credit card.
  [ link to this | view in chronology ]
D Mac, 12 Aug 2010 @ 12:45am

It's not false advertising, It IS unlimited.
I'm not siding with T-Mo, and I'm not saying it is right, however the answer to why more companies are not sued (and why this lawsuit is going nowhere) is because they DO offer unlimited data. There is no 10GB cap.

The issue here is that after you (consistently) exceed 10GB your data speed decreases, but your data access remains. So unless someone can show where T-Mo stated exactly what data speeds you would be getting with this unlimited data plan, then there is no false advertising. Bad PR yes, false advertising no.
[ link to this | view in chronology ]
- MissingFrame, 12 Aug 2010 @ 8:04am
  
  Re: It's not false advertising, It IS unlimited.
  Caveat emptor, sorry but people need to pay attention to the pesky details instead of suing because they didn't. If you're going to use something beyond what 99% of their customers typically do, you should be double-checking that it's possible.
  
  If those other 99% have the same problem, then you have a good argument.
  [ link to this | view in chronology ]
- nasch (profile), 12 Aug 2010 @ 8:45am
  
  Re: It's not false advertising, It IS unlimited.
  So if you exceed certain... limits... they could decide to... limit... your speeds. Artificially. And you consider that unlimited service. OK.
  [ link to this | view in chronology ]
  - D Mac, 12 Aug 2010 @ 1:35pm
    
    Re: Re: It's not false advertising, It IS unlimited.
    So you were under the impression that it was the speed that was listed as being unlimited? That would be nice, but no, it is the amount of data. They make no claims about the speed.
    [ link to this | view in chronology ]
    - nasch (profile), 9 Sep 2010 @ 8:06am
      
      Re: Re: Re: It's not false advertising, It IS unlimited.
      I missed this earlier, don't know if you're still paying attention. But to say that you get unlimited data is a technicality since after you hit your soft cap, threshold, limit, whatever you want to call it, you're not completely cut off. However when a reasonable person sees a service advertised as "unlimited data at up to 10 Gbps" and then finds that it gets throttled to 1 Mbps after 10 GB of data, I think that is seen as deceptive.
      
      I agree with Mike that this is potentially actionable by the FTC. It's their job to make sure companies aren't tricking us, even if what they say is accurate by technicality.
      [ link to this | view in chronology ]
- Anonymous Coward, 12 Aug 2010 @ 12:53pm
  
  Re: It's not false advertising, It IS unlimited.
  The issue here is that after you (consistently) exceed 10GB your data speed decreases, but your data access remains. So unless someone can show where T-Mo stated exactly what data speeds you would be getting with this unlimited data plan, then there is no false advertising.
  
  Oh, I see how that works. In fact, they actually only offer "up to" speeds, which includes "zero"! So even if they never provide you a single byte, they're still within what they agreed to and you still have to make those monthly payments. Nothing wrong with that, huh?
  
  You telco people are really sleazy.
  [ link to this | view in chronology ]
D Mac, 12 Aug 2010 @ 12:45am

It's not false advertising, It IS unlimited.
I'm not siding with T-Mo, and I'm not saying it is right, however the answer to why more companies are not sued (and why this lawsuit is going nowhere) is because they DO offer unlimited data. There is no 10GB cap.

The issue here is that after you (consistently) exceed 10GB your data speed decreases, but your data access remains. So unless someone can show where T-Mo stated exactly what data speeds you would be getting with this unlimited data plan, then there is no false advertising. Bad PR yes, false advertising no.
[ link to this | view in chronology ]
- techflaws.org (profile), 12 Aug 2010 @ 2:08am
  
  Re: It's not false advertising, It IS unlimited.
  So when you say decrease the data speed is actually LIMITED?
  [ link to this | view in chronology ]
  - D Mac, 12 Aug 2010 @ 1:34pm
    
    Re: Re: It's not false advertising, It IS unlimited.
    So you were under the impression that it was the speed that was listed as being unlimited? That would be nice, but no, it is the amount of data. They make no claims about the speed.
    [ link to this | view in chronology ]
    - techflaws.org (profile), 12 Aug 2010 @ 9:49pm
      
      Re: Re: Re: It's not false advertising, It IS unlimited.
      They make no claims about the speed.
      
      So what? They offer an unlimited package. Now they limit a feauture of it which makes it limited.
      [ link to this | view in chronology ]
- abc gum, 12 Aug 2010 @ 6:31am
  
  Re: It's not false advertising, It IS unlimited.
  The time of day at which you can reach the cap is unlimited. You can use the service 24-7.
  [ link to this | view in chronology ]
DearMrMiller (profile), 12 Aug 2010 @ 3:55am

O2 does the same thing...
Recently O2 Broadband, here in the UK, changed the definition of unlimited to mean 40GB however they still market and sell their plan as unlimited. Of course they didn't actually inform the customers when they redefined it, they simply started throttling and threatening disconnects to customers who purchased unlimited plans and used them as normal. After hundreds of complaints due to the threats of disconnect with no recourse they finally, on a users forum, presented their new definition of unlimited though finding that anywhere connected to their sales and marketing is not likely any time soon. For more info:

http://forum.o2.co.uk/viewtopic.php?t=44553&postdays=0&postorder=asc&start=0&am p;sid=9afa6945a3420c74433e7bd5ad7cbc92
[ link to this | view in chronology ]
Anonymous Coward, 12 Aug 2010 @ 4:14am

"Unlimited BS" is more like it.
[ link to this | view in chronology ]
This comment has been flagged by the community. Click here to show it

James Sletten, 12 Aug 2010 @ 4:26am

Great Information
I always enjoy the topics you choose on your site. Got you saved in my favorites now.
[ link to this | view in chronology ]
PrimeSonic, 12 Aug 2010 @ 4:27am

Insight from a CSR.
The issue here is that after you (consistently) exceed 10GB your data speed decreases, but your data access remains. So unless someone can show where T-Mo stated exactly what data speeds you would be getting with this unlimited data plan, then there is no false advertising. Bad PR yes, false advertising no.
This.

Also, the idea of unlimited is to not get overage use charges on your bill. In that regard, you can continue using your service for as much as humanly possible within the month and not pay more for the service than the $25-30 per month you signed up for.
[ link to this | view in chronology ]
Anonymous Coward, 12 Aug 2010 @ 4:40am

because most consumer have no balls!
[ link to this | view in chronology ]
Anonymous Coward, 12 Aug 2010 @ 5:46am

A Math Question
If you have a download speed of X bits per second (obviously a finite number) and you utilize this for every second in a month (60*60*24*30)=2592000, would you say that 2592000 * X is a finite number, or infinity?
[ link to this | view in chronology ]
Terry (profile), 12 Aug 2010 @ 5:57am

Why?????
Why???? Because what would you get by winning. You would have a large bill to pay to your lawyer, who is one person to benifit in all lawsuits. You could have that warm feeling you get from winning, what's that worth. But the truth is in the long run you wouldn't win. The way these things are written protects these companies from just this soet of thing. What needs to really happen is that people must become wiser when making purchases and the warranties that come with them. Remember that it is always ,BUYER BEWARE!!!!
[ link to this | view in chronology ]
jsl4980 (profile), 12 Aug 2010 @ 6:25am

Some tips on how to fight false advertising
I hope Mike updates the post to show people that it is easy to file a complaint against a company who you believe is guilty of false advertising. A quick trip to the FTC's site has a bunch of links that wind up here: https://www.ftccomplaintassistant.gov/

Consumers do not need to sue deceptive companies. The FTC can investigate deceptive and unfair practices.
[ link to this | view in chronology ]
- Anonymous Coward, 12 Aug 2010 @ 6:38am
  
  Re: Some tips on how to fight false advertising
  Yeah their track record is so good I don't doubt for a second that they can help me.
  [ link to this | view in chronology ]
average_joe (profile), 12 Aug 2010 @ 6:46am

I don't see the problem. Other than the limitations, it's unlimited. ;)
[ link to this | view in chronology ]
JLWalk02, 12 Aug 2010 @ 7:57am

Its just like every company out there. T-Mo is no different. It's unlimited service. They never said that we would remain at X speed. Because no company would ever promise a actual speed. They did say that it was unlimited (not at a certain speed) and it is. They slow you down at 10g (who uses 10g worth of data on a phone without tethering it to a pc anyway). My cable company does the same thing, but its everyday. from noon to midnight if I exceed a 5g download, they cut my speed in half. But its still unlimited.
[ link to this | view in chronology ]
Anonymous Coward, 12 Aug 2010 @ 8:20am

Re: Re: Two days ago...
...Karl Bode did a better job reporting this story.
http://www.dslreports.com/shownews/TMobile-Sued-For-Offering-Limited-Unlimited-Service-10980 1

-===-
"Note the link in the post? It's to Karl's story."
-===-

Yes and thank you very much, Mike. I'm commenting on the quality of -your- editorial. Usually when people write something, they add additional information, however you subtracted information. Karl went more in depth, whereas your editorial, which is two days older, frankly is watered down.

To everyone else, I'm sure Mike would be in remiss if you didn't read his take because it's juicy as hell, so be sure to read it.
[ link to this | view in chronology ]
Anonymous Coward, 12 Aug 2010 @ 8:35am

T-Mobile offers so much more bandwidth, Mike says it should be illegal!
These companies don't seem to realize that the airwaves are property of the US Citizens, and are leased to companies for all citizens. There seems to be a concentrated effort by all the parties to de-legitimize the role of the FCC to govern.

T-Mobile offers twice as much data as their closest competitor, and I wouldn't be surprised if the lawsuit was funded/filed by a competitor that is at capacity with the intent of T-Mobile to change their rateplan to be at parity with the rest of the industry.

The easy fix: T-Mobile ad campaign stating "T-Mobile offers so much more bandwidth, it should be illegal!"
[ link to this | view in chronology ]
Ron Rezendes (profile), 12 Aug 2010 @ 10:44am

Unlimited is not bandwidth!
Having worked in the wireless industry for several years I can tell you why there aren't more lawsuits for false advertising. The companies offer unlimited "service" - not unlimited bandwidth - you can access the service anytime 24/7 and use the service. However, the bandwidth is indeed limited (eventually) on virtually every wireless service provider. That is how these companies get away with advertising "unlimited", they're talking about access to the service while consumers think "unlimited" bandwidth which is entirely different.

I don't like the practice of using the term unlimited (meaning access is unlimited) when it's quite clear the public see the word "unlimited" and thinks bandwidth. It's simply deceptive advertising.
[ link to this | view in chronology ]
- nasch (profile), 12 Aug 2010 @ 11:26am
  
  Re: Unlimited is not bandwidth!
  I doubt anyone thinks unlimited bandwidth, just unlimited quantities of data. Perhaps that's not what you meant, but bandwidth is measured in quantity of data per unit of time, for example megabits per second.
  [ link to this | view in chronology ]
  - Ron Rezendes (profile), 12 Aug 2010 @ 12:55pm
    
    Re: Re: Unlimited is not bandwidth!
    Agreed (my bad), unlimited quantities of data are simply not a part of any major wireless carrier's plan - unlimited access is what they claim to advertise.
    [ link to this | view in chronology ]
    - Anonymous Coward, 13 Aug 2010 @ 3:40pm
      
      Re: Re: Re: Unlimited is not bandwidth!
      unlimited quantities of data are simply not a part of any major wireless carrier's plan - unlimited access is what they claim to advertise.
      
      Have you truly not read some of their advertising, or are you just an apologist?
      [ link to this | view in chronology ]
Anonymous Coward, 12 Aug 2010 @ 12:48pm

As I recall, the reason that they're marketed as 'unlimited' stems back from the dial-up days. The connection is unlimited in that you are always online, while dial up required you to call in, make the connection, yada yada.

Now, I think thats absolutely bogus, and I don't know how well it translates to the mobile arena. But I'm about 95% sure thats what happened with previous lawsuits regarding the 'unlimited' connections.
[ link to this | view in chronology ]
6 (profile), 12 Aug 2010 @ 3:58pm

If you feel jilted you can take them to small claims court and get 500$ statutory damages if they rule for you. In VA at least.
[ link to this | view in chronology ]
Anonymous Coward, 13 Aug 2010 @ 4:33am

because in lawsuits the lawyers are the only ones who make money.
[ link to this | view in chronology ]
Anonymous Coward, 13 Aug 2010 @ 9:50am

Many customers of such plans signed contracts and those contracts require binding arbitration. Shows why ADR can effectively keep anyone from fixing abusive practices.
[ link to this | view in chronology ]
Anonymous Coward, 20 Aug 2010 @ 4:42pm

Re to D Mac
Throttling bandwidth after a daily or monthly quota is not the same as unlimited, especially when taken to the extreme. I purchased ********* satellite internet a couple years back (no cable modem or DSL where I was living)

They advertised 768 kbit/sec with a fair use policy as "speed will be reduced when a user exceeds 200MB per day". Sounded fair, so I signed up--and entered a contract. Service was installed and once I exceeded the 200MB, throughput dropped to around 40-60 kbit/sec and latency jumped to 15000 msec. WTF? I've seen Windows updates bigger than 200MB!

We'll see more fair use policies appear on wireless broadband, and I'll bet we see more of the same issues.
[ link to this | view in chronology ]
justinbryan, 24 Aug 2010 @ 6:04am

It is really an question mark on our administration that why they don't sued for bogus companies on their bad advertising policies.
[ link to this | view in chronology ]
Josh Fourrier, 16 Jan 2011 @ 5:02pm

T-Mobile DOES advertise UNLIMITED
I hate to break it to those of you who claim T-Mobile doesnt advertise unlimited speeds... but they're still advertising unlimited web on my account... I just signed up with them dec 28th 2010.

It says UNLIMITED 4G WEB

Here's a link to a screenshot of my account if anyone wants to check it out:

http://i1199.photobucket.com/albums/aa473/josh4ea/tmobileplan.jpg
[ link to this | view in chronology ]