Electric Review

Culture & Criticism Since 2003

Redress Limited For AT&T Cell Phone Users Alleging Deceptive Pricing

I believe I recently fell victim to one of the oldest business cons there is – the Bait and Switch, this one orchestrated by AT&T Mobility. 

My story goes like this.

In early 2018, AT&T stopped sending me paper bills. After trying in vain to fix the situation, I was forced to go to a local AT&T store to make my monthly payments. Eventually, I was nudged into paperless billing and auto-pay, allowing AT&T to debit my monthly charges from a checking account. In exchange, I was promised a $10 per month discount. Yet, eight months later, AT&T still refuses to honor the $10 monthly discount.

In December, I filed a complaint with the Federal Communications Commission (FCC), which facilitated contact between AT&T and me. However, this went nowhere. Even though AT&T’s case manager did not dispute my claim, she nonetheless said AT&T was not going to provide the already promised discount unless I “migrate service to an eligible plan.” As you can guess, this costs more money.

My situation is not an anomaly. A CBS News investigation from 2017 showed an alarming 4,000 customer complaints against AT&T for things like over-charging and deceptive promotions during just a two-year period. Additionally, in September 2015, a 17-year AT&T employee turned whistle-blower, writing to the Dallas Morning News about AT&T’s devious customer service tactics. This letter read in part: “As retention reps, we are told to not only retain existing customers after their promotions expire, but to also sell more to these people … this has created a culture of reps promising promos, but not adding them …”

Ana Pallas, a media relations representative for AT&T Northern California/Northern Nevada did not respond to an e-mail request for an interview.

What happened to me has been referred to as ‘Bait and Switch.’ These schemes are a derivative of false advertising, occurring when companies lure customers with false promises. Once buyers are on the hook, some companies reverse course and renege on the original deal, steering the consumer toward a costlier package. Under California law, Bait and Switch is considered a “deceptive trade practice” – expressly prohibited under both California Business and Professions Code § 17200, et seq. (i.e., the Unfair Competition Law or “UCL”) and Business and Professions Code § 17500, et seq. In turn, violators could be sued by both private parties and public prosecutors, such as attorneys general (AG) or district attorneys (DA), with both monetary and criminal penalties in place.

However, these laws are irrelevant in here. As a condition to buying cell phone service with AT&T, individuals waive the right to seek a jury trial when they sign their activation contract. Instead, AT&T forces binding arbitration on its mobile customers, while prohibiting participation in class action suits. Moreover, the legality of these types of cell phone contracts has withstood court challenges by consumers. Specifically, in the 2011 case, AT&T Mobility v. Vincent Concepcion, the U.S. Supreme Court held that AT&T could restrict subscribers to arbitration proceedings as a means to resolve disputes.

“Nobody is better off with arbitration than they would be with a jury,” says Paul Bland, Executive Director for Public Justice in Washington D.C. and a leading expert in challenging mandatory arbitration clauses in consumer contracts. In an interview, Bland added that: “[t]he majority of the time [with arbitration], the arbitrators who handle these cases are also defense lawyers for corporations.”

Nationally renowned civil attorney Joe Cotchett from Burlingame, California agrees: “It [compulsory arbitration] is a tragedy that has hit our country and that has been allowed by the courts. Corporations have been allowed to get away with murder.”

All this makes it painfully obvious that private citizens are powerless to fight a tele-media behemoth like AT&T. Instead, solutions must originate with Attorneys General and other public prosecutors under the consumer protection statutes referenced above.

A recent case affirms this position. In January, the Associated Press reported that Wells Fargo Bank paid  $575 million to settle an investigation by AGs in all 50 states. Complainants claimed Wells Fargo tricked its customers by opening fake accounts and selling them useless products, all to bolster profits and meet sales margins.

“Generally speaking, an Attorney General has a lot of authority to go after [those using] deceptive trade practices,” notes Bland.

“If they [Attorneys General] say they don’t have jurisdiction to proceed [then] the AG should force jurisdiction by legislation. [Corporations] have to operate honestly [on the public],” states Cotchett, who has advocated for the rights of consumers since the mid 1960s.

In sum, multiple agencies remain unfettered to enforce the laws forbidding the use of deception on consumers.  And since AT&T’s cell phone users have been stripped of their day in court, it is now up to AGs and DAs to stand up and wage the war for us.

by John Aiello


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This entry was posted on April 2, 2019 by in 2019, April 2019, In the Spotlight, Rat's Notebook and tagged .
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