AT&T’s in hot waters as customers revolt against hidden fees


Anyone who has a cellphone plan probably knows that the advertised prices that we see in TV commercials or in stores are typically a bit lower than what we end up paying once our bill shows up at the end of the month. Typically there are a few different fees and taxes which are tacked on at the end which are added to our monthly service rate. It’s not a huge deal for most since we’re used to this when we buy other products or services.

That being said, AT&T customers are fed up with the company’s deceitful practices of hiding a $2 “service fee” and have filed a lawsuit in the Northern District of California. The charge against AT&T is that the company doesn’t properly disclose its service fee to customers when they sign up with AT&T and that the charge is then hidden in the bill within a section which is typically reserved for taxes. 

AT&T claims that the $2 service fee that it charges its customer each month is for interconnect charges and cell site rental costs and reserves the right to raise the fee whenever it deems necessary. Unfortunately, AT&T’s earnings reports show that the company’s expenses related to interconnect charges and cell site rental costs have gone down since the service fee was first implemented in 2013 as a $0.61 monthly charge. 

Moreover, on information and belief, the fee is not, in fact, tied to the costs that AT&T’s buried description suggests. This is corroborated by the fact that AT&T has repeatedly increased the amount of the monthly Administrative Fee since the fee was first imposed, while during that same time period the stated costs that the Administrative Fee is purportedly paying for (i.e., interconnect charges and cell site rental charges) have actually decreased according to AT&T’s financial statements.

In all events, AT&T should clearly disclose the Administrative Fee and should clearly and accurately state the true monthly prices for its post-paid wireless service plans in its price representations and advertising. AT&T has failed to do so, and continues to fail to do so.

The lawsuit against AT&T is seeking class-action status, claiming that the company has illegally collected “hundreds of millions of dollars” from its customers. It’s not clear yet how the Northern District of California plans to handle the case at this point. If the lawsuit is successful or if they are able to settle, AT&T customers could be entitled to a settlement check of $100 or more if they have had AT&T service since 2013.

While no service provider is perfect, we do appreciate the T-Mobile approach which included all service charges, fees and taxes in the advertised price. With T-Mobile, the price they advertise is the price you pay. We’re hoping AT&T and other service providers will adopt this model in the future, giving the consumer a true snapshot of what their bill will be each month before they actually sign up.

Source: Ars Technica

Nick Gray
I'm a life-long tech enthusiast who has a soft spot for HTC. After writing about tech for more than a decade, I jumped at the opportunity to take on the role of Editor in Chief at Phandroid. Please contact me at [email protected].

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