AT&T Wireless fine print irks customers

Some customers of AT&T Wireless are being hit with unexpectedly high bills when their plans expire, the result of a little-known clause buried within their contracts.

Alorie Gilbert Staff Writer, CNET News.com
Alorie Gilbert
writes about software, spy chips and the high-tech workplace.
Alorie Gilbert
4 min read
Some customers of AT&T Wireless are being hit with unexpectedly high bills when their plans expire, the result of a little-known clause buried within their contracts.

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Wireless plans are notoriously complicated, to the point that some companies have run ad campaigns touting their own simplicity while mocking other companies' tangled contracts. In the latest example, an easily overlooked detail in AT&T Wireless bills is generating a fresh round of customer complaints.

Some AT&T Wireless customers are learning the hard way that the extras they received when they signed up for service, such as bonus minutes, no longer apply when their one-year contracts expire. As a result, people who think they're calling within the allotted minutes of their plan, are instead charged additional per-minute fees.

The practice contrasts with that of most other major wireless companies. Verizon, Sprint, Cingular and Nextel, for example, continue to bill customers on a month-to-month basis under the same terms and conditions as their original contracts after their contracts expire.

In the case of AT&T Wireless, many customers become aware of the unique clause only after they receive a sizable monthly bill.

Pat McNulty, a mother of two in Monterey, Calif., said she recently received a $100 bill from AT&T Wireless for her daughter's monthly service, which is normally $29.99. When she called AT&T Wireless customer service to question the charges, she was told her daughter's contract had expired, as had the "promotional" extra weekend and evening minutes previously covered in the plan.

"Deceptive" tactics
The service representative offered to credit McNulty $60 if she renewed her daughter's contract for another year. "The tactic is extremely deceptive and I think it was done intentionally to make you renew or pay up," McNulty said.

McNulty complained that the only notification the company gave her of the impending change in her daughter's plan was in fine print on page five of a 10-page bill.

Consumer advocates say McNulty's anger is justified.

"We would expect that service after the expiration of the contract would be on the same terms and conditions on a month-to-month basis," said Carl Hilliard, president of the Wireless Consumers Alliance, a non-profit organization in Del Mar, Calif.

"If AT&T is not willing to continue service on that basis, we would expect them to give notice to the subscriber in a plain and conspicuous manner," he said. "Certainly an obscure note on page five of the bill does not constitute notice."

AT&T spokesman Ritch Blasi said the company alerts customers on page five of their bills, 60 days in advance of the plan expiring, because that is where minutes and other billing information is listed. The company also notifies customers that promotions such as extra weekend minutes are good only for a year when they sign up for their plans, he said.

Blasi was unaware of any complaints about the expiration policy, which applies nationwide and is not unique to customers in California.

AT&T Wireless is among the largest of the wireless services providers, with more than 20 million subscribers. It also ranks highest in overall customer satisfaction and service among wireless providers, according to a J.D. Power and Associates survey of more than 17,600 U.S. households. J.D. Power measures customer satisfaction in many industries.

Customer dissatisfaction
Lee Biddle of the Utility Consumers' Action Network, a utilities watchdog group in San Diego, said the group has received several complaints about the AT&T Wireless expiration policy.

"It does seem like a hammer they hold over you to keep you on a contract," Biddle said.

The issue highlights an unfortunate trend in the wireless services industry: an ever higher level of customer complaints. The percentage of all wireless subscribers who have called customer service centers at least once in the last year with complaints has climbed to 61 percent, from 53 percent in 2000, according a recent J.D. Power study. The level of customer complaints is higher than for many other consumer services, including land-line telephone, cable television and stock brokerage services, said Kirk Parsons, author of the study.

Customer service has never been a strength of the wireless service companies, said Michael Doherty, a telecommunications analyst for research firm Ovum.

"Wireless companies were always looking for the new customers and churn was always a secondary issue," said Doherty, referring to poor customer retention rates across the industry. "For every customer leaving, there were always two or three more coming in the door. Over the last year or so that has changed radically."

As growth in the number of new cell phone users slows, analysts say AT&T Wireless and other service providers are starting to work at improving customer service. But they don't always distribute improved service equitably, Doherty said.

Service providers are beginning to do more customer segmentation, often factoring in the amount of revenue a customer generates for the company. Big spenders may get special treatment or better promotions.

For instance, a high-value customer whose contract and promotional extra minutes are about to expire may get a call from the company offering a new promotion, but the offer isn?t extended to all its customers.

"That's going to leave some people with the short end of the stick," Doherty said.