AT&T Quietly Adds Charges To All Contract Cell Plans

guttentag writes "The Wall Street Journal is reporting that AT&T Mobility, the second-largest wireless carrier in the U.S., has added a new monthly administrative fee of 61 cents to the bills of all of its contract wireless lines as of May 1, a move that could bring in more than a half-billion dollars in annual revenue to the telecom giant. An AT&T spokeswoman said the fee covers 'certain expenses, such as interconnection and cell-site rents and maintenance.' The increased cost to consumers comes even though AT&T's growth in wireless revenue last year outpaced the costs to operate and support its wireless business. The company has talked of continuing to improve wireless profitability. Citigroup analyst Michael Rollins noted that the new administrative fee is a key component for accelerating revenue growth for the rest of the year. He said the fee should add 0.30 of a percentage point to AT&T's 2013 revenue growth; he predicts total top-line growth of about 1.5%. Normally, consumers could vote with their wallets by taking their business elsewhere. AT&T would be required to let customers out of their contracts without an early termination fee if it raised prices, but it is avoiding this by simply calling the increase a 'surcharge,' effectively forcing millions of people to either pay more money per month or pay the ETF."

Comments

Surcharge

[rwise2112]

AT&T would be required to let customers out of their contracts without an early termination fee if it raised prices, but it is avoiding this by simply calling the increase a 'surcharge'

I love the way there's always a loophole!

Re:Surcharge

[Lithdren]

While true in theory, what ends up happening is you call to cancle because of the breach of contract, and you get yelled at and treated badly by their 'customer service' for 3-4 hours as you escilate up the chain trying to terminate your now null and void contract without paying the ETF, over 61 cents a month.

Most people will just cave and either switch once the plan is over, or not bother switching at all, because the hassel of getting these jerks to do what is legal and right will end up costing you half a days wage when you take them to small-claims court to get it overturned by a judge because they dont even bother showing up in court.

Oh but dont worry, if you DONT pay the ETF and ignore it, they'll send you to collections, where when you dispute the charge, will get added to your credit rating and affect you for the next 10 years or 7 years or whatever the hell it is, even after you get them to agree that the charges were wrong, unless you spend even more time writing letters and sending lawsuit judgement letters to the credit agencies to get it cleaned up. Even then, might not work.

Companies need to get slapped across the face when they pull this crud, individuals are unable to fight this kind of stuff without sacrificing more than what its going to end up costing them if they just put with it, which is of course excatly why AT&T and their kin do this kind of thing.

Re:Surcharge

[gstoddart]

There's not. This is blatantly illegal and a breach of contract.

Sadly, that contract says they can make a lot of changes whenever they want to -- like all modern contracts, the company basically says "we can do anything and you can eat shit".

Terms of service for a web site or a product pretty much all nowadays put the power entirely in the hands of companies to do as they please. And since corporate profits are the highest principle in the land, the courts have upheld that as perfectly fine.

If AT&T has decided they need to pad their bottom line by tacking on a little extra surcharge .. there's not a hell of a lot you can do about it. How many of us have received letters from our cell phone companies which more or less say "in order to keep corporate profits at record levels we will be increasing your costs"?

Nothing is illegal when you're a large company these days. And, since they've all updated their TOS to say you can't sue them in a class action suit, you don't have any recourse.

Re:Surcharge

[tutufan]

It's not as immediate, but I maintain a "shit list" of companies that I will never deal with again (dire circumstances excepted). AT&T is already on it, and for much worse shenanigans than this.

The important thing, though, is to have that list and follow through. Don't think that it doesn't matter. One less customer pulls cash straight off the bottom line, and there's absolutely nothing they can do to change that.

Re:Surcharge

[serviscope_minor]

My impression of what will happen when they get your letter:

Your impressions are misplaced.

The thing is that letters are looked on kindly by the court system, and you can get into a lot of crap for ignoring then. And in the second case in particular there's a really huge risk.

In a big company, mail will be dealt with by the mail department. By the time it gets to whoever it's meant to get to, they probably won't know whether it was sent by certified mail or not. Lieing about receiving a letter is not worth their time.

Or if you really feel that they are going to do that, you can send the mail certified or with a return receipt.

-"HAHAHA this guy thinks we're going to let him out of our illegal charges! NOPE!"

That is by far the most likely response. But, I never said it would only take one letter. A little bit of persistence is required, but either way you'll waste a lot less time mailing it than phoning.

Re:Surcharge

[gstoddart]

It's always worth finding the other option, and it's the only way these giant monopolizing bastards will ever learn: when their customers start leaving in the thousands.

Sadly, these days it's out of the hands of one set of giant monopolizing bastards and straight into the hands of another.

Since the big players have been steadily buying the small players, sooner or later, it's all the same people who own them. And where it's still multiple large corporations, they usually get together to agree on how to screw us over anyway.

In many market segments, the notion of a 'free market' is a laughable joke, since it's all controlled by a few multinationals.

Re:Surcharge

[Zordak]

This is the sole reason I'm on the fence about class actions. On the one hand, the consumer plaintiffs never get anything out of them. They're solely for the enrichment of plaintiffs' attorneys. On the other hand, it is often the only way to hold a big player accountable when it screws a whole lot of people just a little. It's like commissioning a privateer to fight pirates by saying, "Capture them, and any stolen booty you can find on the ship is yours to keep. Just get them out of my shipping lanes." (Which, by the way, is almost exactly what the King of England told Captain Kidd. Except he also said, "And I get a cut of the booty, too.")

Anyone stupid enough to use AT&T

[dmgxmichael]

deserves what they get. Worst Telcom in history (and that's an achievement considering how rotten all of them are.).

Re:Anyone stupid enough to use AT&T

[socrplayr813]

You can get unlimited talk, text, and data through Straight Talk or similar for less than $50 a month. Bring your AT&T phone and just buy a new SIM card, if you like (usually around $15 or less). Or if you're not overly concerned with having the fanciest phones (which these days doesn't make nearly as much difference as it did 2-3 years ago), you can get a phone on Verizon's network and possibly have better coverage.

Yes, I think you're nuts.

cover certain expenses..

[gl4ss]

..which are the expenses you were supposedly paying for already.

ditch 'em. and sue 'em for screwing the etf.

what good is the rule, if they just add charges and still have you pay the etf?

Ain't it great?

[bradley13]

"the new administrative fee is a key component for accelerating revenue growth for the rest of the year"

So, have I understood this correctly? If you have a contract with them, they aren't violating it, because they aren't raising your rates. They're just adding a separate administrative fee. Reminds me of the game airlines play: your flight is cheap, but you have to pay the fees for the airports, for fuel, for your luggage, for having wings on the airplane...

This is great for the bean-counters and marketeers, but it's unethical as hell. Why do big businesses lose their ethics? Does MBA stand for "Must Be an A**hole"?

Re:Ain't it great?

[ATMAvatar]

Why do big businesses lose their ethics?

That's rather easy to explain. Businesses never really had ethics. They're out to make money, and these kinds of situations are simple risk vs. reward calculations. The activity brings in more money, and any laws to curtail corporate misbehavior have long since been rendered toothless. The only consideration is whether customers would leave en masse, but between the early termination fees and the fact that most costumers have some pathological fear of standing up for themselves when a corporation jerks them around, that's rather unlikely.

Re:Ain't it great?

[Black Parrot]

Why do big businesses lose their ethics? Does MBA stand for "Must Be an A**hole"?

"Money Beats Anything". Why have ethics when you can have money?

Money is the root of all evil. They're trying to make the world a better place by limiting its distribution.

I love this show

[paiute]

Congressperson: That's fucked up. I should introduce legislation which would allow the consumer to get out of their contract if the carrier breaks it like this.
AT&T lobbyist: (Opens suitcase full of cash.)
Congressperson. Free market!

Bend over...

[Anonymous Coward]

And this my friends is why business imposed rule (law for the average consumer since it's legally binding and generally not practical/worthwhile to fight for your average Joe) through contractual agreements that sign your rights away (including participating in class action suits) is a bad thing. I'd like to see consumers in mass refuse to sign agreements waiving all sorts of liabilities to businesses and rights of consumers. This will not happen and businesses are well aware of it. As such, businesses' legal teams can tuck away with all sorts of crap in contracts/agreements for product/services that makes me want to vomit.

"After all, why bother reading and comprehending that 14+ page document you're signing? Just initial these pages and sign here to get what you want, no one reads these things after all (except us--Good Corp.--and the courts) and this particular example you read about helps our consumers at a completely insignificant cost (it's only $0.63 here, $.53 there, ..., $6.56/mo tomorrow)! We Good Corp. sales associates verbally cross our hearts what we've told you is true (though statements are counter to the contract), even though it won't legally hold a candle to that contract you just signed symbolizing you: read, understood, and agreed to all terms expressed there in. It does make you feel better though, right?" Then average said consumer signs, agrees, and moves on.

Every time I see this happen I watch my options dwindle to: A) completely refusing a product/service (since all competitors have similar agreements) or B) am forced to buy in with everyone else. Please, stop being wreckless with your purchasing power people. Purchasing power is real, it's just being manipulated to the masses. When the bulk of consumers realize this, we'll all get screwed a little less, which means it's time to stock up on lube.

Re:Bend over...

[hedwards]

You can blame the courts for that. It astonishes me the complete and utter lack of common sense in the judiciary. We're not all rich enough to be able to afford an attorney every time somebody asks us to sign a contract. We don't have access to a law library to look up the precedence over whether or not they're allowed to call this a surcharge.

At the end of the day, the law needs to recognize that people can't sign away their rights. Especially in cases like this where the only competition also requires us to sign away our rights.

Re:Write to your state AG

[VortexCortex]

I agreed to a particular price, if they can not offer the service and make profit for the price they offered it to me at, its their own bad business decision...

Not only that, but the prices should never go up for the same service. It's not like the machines want better working conditions (yet). Growing revenue with a surcharge is not a valid way to grow revenue. You grow revenue by getting more customers, providing a better service, using more efficient hardware, PROGRESS. This is a pure example of profit for profit's sake. It's stealing, plain and simple. Taking from me without giving any benefit in return is stealing, even if the amount is too small for us to notice individually, in aggregate it's outright theft.

If I came home with a big pile of cash the question would be: "Wait, where did you get all this money?!" If I was AT&T my answer would be: "Uh, from customers?" "What did you do for them to get the money?!" "Nothing!" THAT'S STEALING. It would be one thing if they actually had higher costs to operate, the answer could be "I provided them with a service that cost more to provide", but that's a lie. Costs they're citing have actually GONE DOWN.

So long as it remains more profitable for companies to simply oversell and raise the prices to make profit vs using some profit to do the work to provide better services then you can expect this to happen again and again. What happens if you spend a bunch of profit to provide a better service? Your stock price goes down. Blame the fucking stock market.