The Federal Trade Commission obtained a temporary restraining order against telecommunications companies Disruption Theory and Emergent Technologies for marketing "unlimited" calling plans to the friends and family of prison inmates, even though the plans don't, in fact, provide "unlimited" minutes. 

The companies -- which do business as and -- marketed calling plans that make claims such as, "3 Months w/UNLIMITED Minutes," "1 Month UNLIMITED Mins," "90 DAYS OF UNLIMITED TALK," and "We do not charge 'per minute.'"  In its complaint, the FTC alleged that although the companies market these calling plans as "unlimited" plans, they're not unlimited at all.  Rather, the plans simply charge for calls at per-minute rates. 

Last week, NJ updated its guidance on COVID-19 related charges for most utilities in Executive Order 190.

Water, Gas, and Electricity:

No household may have its electricity, gas service, or water service shut off for nonpayment. This moratorium on utility shutoffs is extended to at least March 15, 2021 and applies to all residential gas, electric and water utilities, both public and private.

If there is any customer whose service has been disconnected since March 16, 2020, their service must be reconnected.

In addition, utilities will not be charging late fees nor fees to reconnect services that have been disconnected.

Although utility service shutoffs are still suspended, customers are still encouraged to set up payment plans with their utilities so they can begin paying their bills, if they are able, over a period of time.

According to NJ State published information on line, if you are struggling to pay your utility bills, contact your utility company about assistance programs and payment plans, or visit BPU's “Assistance Programs” page for information about programs that can help.

Note: For any questions about your service, first contact your utility company. A list of public gas and electricity utility company phone numbers is available here.

If you are unable to resolve an issue with your utility company, you should contact BPU's Customer Assistance team by filling out this online form, or by calling (800) 624-0241 and leaving a voicemail.

Phone and Internet:

No cable or telecommunications provider that provides residential internet and voice services to New Jersey residents shall terminate these services due to nonpayment before November 15.

After November 15, cable and telecommunications providers are required to enroll customers with an already existing account in an interest free payment plan of at least 12 equal monthly installments, including the balance already due, prior to disconnecting the customers service.

For households with school-age children who need Internet connectivity for remote-learning, Internet shutoffs will not be permitted through March 15, 2021. If a household experiences a change of circumstances where school age children will be using their home Internet service for school, the cable and telecommunications company will be required to reconnect that Internet service.

Source: Executive Order No. 190

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team's webpage.

If you have any questions about this post, please contact Brad A. Molotsky, Elizabeth Mincer, Paul Josephson, Matthew LoBello or the attorney in the firm with whom you are regularly in contact.

Be well and stay safe.


Andrew Smith, Director of the FTC's Bureau of Consumer Protection, said, "These defendants ripped off families with loved ones in prison, selling them fake calling plans that were supposed to allow unlimited calls with those inmates.  Especially with COVID-19 restrictions now in place, the phone is a lifeline for these families, who shouldn't have to deal with this kind of exploitation."

Assuming that the FTC's allegations are accurate here, on its face, there's nothing groundbreaking about this investigation.  It should come as no surprise to marketers that you shouldn't market a calling plan as "unlimited" when the plan isn't, in fact, unlimited.  

What struck me about this case, however, was who the FTC is looking out for.  Here, the FTC took action to protect a vulnerable community that hasn't been a big focus of consumer protection action in the past -- prison inmates and their families and friends.  In addition, the FTC specifically alleged in its complaint that, "Because a disproportionate number of incarcerated individuals are from communities of color or lower-income communities, many of the consumers harmed by Defendants' practices are likely from these communities."  This suggests to me that the FTC is not only engaging in consumer protection here, but is consciously -- and laudably -- making decisions to use its limited resources to engage in enforcement actions to help people of color.  

Originally published by Duane Morris, October 2020

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