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The largest US pay-as-you-go mobile provider TracFone Wireless agreed on Wednesday to pay $40 million (£26m) to settle claims that it misled millions of smartphone customers.
The Federal Trade Commission said TracFone’s advertising promised unlimited data, but the company drastically slowed down consumers’ data speeds — a practice known as throttling — once they had used a certain amount of data within a 30-day period.
In some cases, the commission said, the company cut off customers’ data service when they ran over the limit.
Throttling slows down the ability to open web pages or stream video.
The commission said that TracFone generally throttled the data flow if a customer used between 1 gigabyte and 3GB.
“Unlimited means unlimited,” said consumer protection bureau FTC.