- $40 Million Anticipated Settlement for Consumers Announced in TracFone Class Action
- March 24, 2015 | Author: Michael W. Sobol
- Law Firm: Lieff, Cabraser, Heimann & Bernstein, LLP - San Francisco Office
- Michael W. Sobol, the chair of the consumer practice group at the national plaintiffs' law firm Lieff Cabraser Heimann & Bernstein, LLP, announced today that consumers who purchased service plans with "Unlimited data" from TracFone Wireless, Inc., sold under its brands Straight Talk, Net10, Telcel America, or Simple Mobile, may be eligible to receive payments under an anticipated $40 million settlement in a nationwide class action lawsuit.
The binding term sheet for the class action settlement was reached in coordination with a Consent Order which the Federal Trade Commission authorized this week, and which will be filed with the same Judge presiding over the previously-filed consumer class action. "The FTC states that it files a complaint when it has "reason to believe" that the law has been or is being violated, and here, the class action complaint alleging violations of law appears to have pre-dated the FTC action," Sobol said. Plaintiffs in the class action will now promptly seek Court-approval of the class action settlement.
"We are delighted that the Federal Trade Commission has joined with consumers to help achieve a comprehensive resolution of the case," stated Sobol, class counsel for the consumers, who in July 2013 initiated the litigation over TracFone's representations of "Unlimited" data plans. "The settlement will offer compensation for customers who had the speed of their data service significantly reduced by a practice called 'throttling,' despite being promised 'Unlimited data.' The settlement will also improve future disclosures and notifications of data limits and throttling practices," Sobol remarked.
Consumers that purchased Straight Talk, Net10, Telcel America, or Simple Mobile wireless service plans with "Unlimited data" during the period of July 24, 2009 through December 31, 2014, and who, at any time during this period, had the speed of their data "throttled," suspended, or terminated at TracFone's request will either receive a direct payment, or are eligible to participate in the settlement's claim process. "Customers who can be identified may receive a payment without having to make a claim, but all eligible customers are strongly encouraged to make a claim to best ensure participation in the settlement," Lieff Cabraser's co-counsel, Daniel M. Hattis, stated.
Consumers should visit www.PrePaidPhoneRefund.com to learn more about the possible class action settlement and submit their claim. If the settlement is approved, all payments to consumers through the settlement will be made by a Court-appointed claims administrator, as will be specified in the class action settlement agreement, subject to approval by the Court.
One of the nation's largest wireless carriers, TracFone uses the brands Straight Talk, Net10, Telcel America, and Simple Mobile to sell mobile phones with prepaid wireless plans at Walmart and other retail stores nationwide. The class action alleges that TracFone falsely advertised its wireless mobile phone plans as providing "unlimited" data while actually maintaining monthly data usage limits that were not disclosed to customers. It further alleged that TracFone regularly throttled, suspended, and in certain cases terminated customers' data plans pursuant to the secret limits.
The settlement would permanently enjoin TracFone from making any advertisement or other representation about amount of data its cell phone plans offer without disclosing clearly and conspicuously, and in close proximity to the representation, all material restrictions on the amount and speed of the data plan. Further, TracFone and its brands may not state in their advertisements and marketing materials that any plan provides "unlimited data" unless there is also clear, prominent, and adjoining disclosure of any applicable throttling caps or limits, the lower speeds to which consumers will be throttled or slowed, and any other terms regarding data usage suspension or services terminated.
The Consent Order filed by the FTC this week was filed in the same federal court, the Northern District Court of California, where the class action was already pending. The class action settlement is subject to review for fairness by the Court. No payments to class members will be made under the settlement unless and until the Court approves the settlement. As noted above, eligible TracFone customers may submit their claims now for possible compensation at www.PrePaidPhoneRefund.com.