TheAgitator.com
Shaming AT&T
Monday, July 14th, 2008So last March I lost my cell phone.
I went to my local AT&T store to get a new phone (I had Cingular’s service until AT&T bought them out). I was first surprised to learn that if you lose or break your phone, not only do you have to buy a new one (which is of course understandable), but you also have to buy an entirely new wireless plan. That means a new three-year contract.
I ended up buying a Nokia phone that came with a $100 mail-in rebate. I loathe mail-in rebates, but I didn’t have many other options at the time. About eight weeks later, I got my rebate. Unfortunately, it was in the form of an AT&T debit card. You allegedly can spend the card anywhere, but it was declined at two of the five places I tried to use it. The really sleazy thing is that if you try to use the card to purchase something that’s more than the amount left on the card, the card gets declined. So if you have, say, $6.47 left on the card and want to put that amount toward a $15 purchase, the only way you can do it is to call AT&T, find out exactly how much is on the card, and tell the merchant to charge that amount. Conveniently, it also takes AT&T a couple of days to update your account to reflect your purchases.
For each individual customer, it’s a minor hassle. But if AT&T sells a million phones with mail-in rebates that come back as debit cards, the two or three dollars left on each card adds up pretty quickly.
(Libertarian disclaimer: I’m not saying this practice should be illegal–I’m sure it was included somewhere in the print that I should have read at some point before buying my phone. I’m just saying it’s sleazy, and deserves some public shaming.)
The other part of my experience is more frustrating. I knew in March that the iPhone 3G was coming, so I specifically asked the sales rep if renewing my contract for three years would disqualify me from getting an iPhone. He said–and I remember this because I’ve been planning to get a new iPhone since I read about the upgrade–that while you’re normally charged a $200 fee to upgrade before your contract is up, AT&T makes a specific exception for the iPhone.
I was told today that that’s not the case. If I want the iPhone, I’ll have to pay $200 to break my service contract, which would basically put the cost of the phone at $400. Now if that was the case all along and I’d been told as much, I’d have no complaint. I’m just pissed that the sales guy lied to me.
Doesn’t AT&T work off of GSM? Unless they’ve changed the policies, you should just be able to switch out SIM cards…unless the iPhone works on a different data plan…I use AT$T with The Tilt. To get a data plan I have to use their “PDA” data plan which is $30/month…I don’t need internet on a three inch screen that bad…
Why not just go to walmart and get one of those 10 cent a minute phones, like Net10. Pay for it with cash to maintain your privacy. No locking yourself into contracts, and wide coverage, and fairly cheap if unless you are on the cell phone constantly. I ditched those cell phone contracts a while back and am never going back to them.
Just one more reason I refuse to buy anything from AT&T OR Apple. There are plenty of other companies whos products I won’t buy, but Apple is at the top of the list.
“I went to my local AT&T store to get a new phone (I had Cingular’s service until AT&T bought them out). I was first surprised to learn that if you lose or break your phone, not only do you have to buy a new one”
That tiny bit of plastic that protects the antenna broke on my phone, so the antenna keeps popping out and I get no signal half the time because god-knows-why, so when I ask if I could somehow have a 20¢ replacement part for the thing, they said I had to buy a new phone instead.
My wife also lost her Cingular phone recently. Rather than sign up for a new plan, she got a pay-as-you-go phone and will now be paying considerably less (probably less than half) than what she was before. Unfortunately, she will still have to pay for the remaining five months of her plan. The buy-out was the same as paying the monthly bill.
As for rebates, I have nothing good to say about them. I don’t think they should be illegal, but they should be delivered as promised, and if not, companies should be charged with fraud. They didn’t get to be one of the top complaints against merchants for no reason.
Anytime government partners with business to bilk people out of their hard-earned cash, it’s a deal made in hell. The fact that states collect sales tax on the value of the rebate is a scam all by itself.
I use Virgin pay-as-you-go (runs on Sprint network). I chose Virgin, well, beacuse I have a HS sense of humor. The fees are reasonable. I can switch to any number of phones with no issues (I threw one against a wall….anger-fuelded ballistics test…and the cost to get a similar phone was under 100 bucks with no transfer fee).
I get unlimited texting. I can start and stop any plan anytime I want. Only caveat is that there must be 20 bucks buying activity every three months or they suspend account (but don’t delete for some time after). 100% happy with it. Not as fancy as I-phone or as functional as a Blackberry, but still get Yahoo, internet, and a host of other features.
IIRC, at the time, the saleperson wasn’t lying to you. The 2G iPhone was treated as a special upgrade case by AT&T, and everyone (except some AT&T and Apple execs) was surprised when it was announced that the 3G was going to be treated differently.
Sithmonkey – If you buy the iPhone without a plan it costs twice as much (if Radley wanted to buy the 8gig iPhone without a plan it would be 600 bucks… it would be cheaper for him to pay the early termination and take the discount that comes with new plan) and it has a different set of data plans than any other phone.
Radley – A three year plan? Every phone I’ve had (and I have AT&T now) comes with a two year commitment.
Cellular companies are stupid. I was a customer of Sprint for nearly ten years with two lines. Over that time I had two phones (first one was stolen). When my second phone was dying, I went to the Sprint store and asked them to make me a deal on a new, bottom of the line phone. I didn’t want to spend more than $50. I don’t need bells and whistles. So the store says they can’t do anything for me, pay full price on these phones or sign up for a new 2 yr plan and we’ll give you a deal on a phone (I was past my contract at this point). The lack of customer service (employees were poorly trained and rude) combined with the stupidity of the business practice sent me over the edge. I told them they could either make me a deal on a phone, or lose me as a customer. They chose the latter. I went across the across the street and signed up my two lines with Verizon.
And yes, the guy who invented rebate debit card thingies ought to be taken out an shot. I’m kidding, of course. But if he were to suddenly disappear into one of those secret Eastern Block prisons the CIA set up, I would want him to be the last one let out.
Radley, your problem stems from the fact that you believed a cell phone employee. To take it further, why would anyone trust what any employee tells you? I take notes, ask for their ID, call back to make sure they took proper notes of our conversation, double check what I was told with someone else, etc. I’ve found it’s about 50/50 for accuracy, which is not good. Buyer beware!
If you don’t want to sign a new contract, you can normally just buy a phone at regular “equipment-only” price and switch it out. You should be able to get any compatible phone from any number of places. The carrier is going to charge much more for equipment-only than anywhere else.
Maybe this had something to do with the Cingular to ATT switch, I am not sure. I have always had Verizon and I can change phones whenever I want with an ESN program change. I tend to keep my old phones for this reason. If anything happens to my new phone I will just switch to one of my other phones, provided they have the same technology.
Why hate Apple? They are one of the most customer-oriented companies I’ve ever done business with. I’ve owned Macs for almost 5 years now and have had two issues in that time. Both times I called the 1-800 number and the CSR gave me a choice: mail them my laptop (in a box that they FedEx to my door) and they ship it back to me (all this for free) or go to an Apple store and have them perform the service (again, for free, minus the cost of gas, that is). Both times I chose to drive to the Apple store where I was greeted promptly and courteously, and both times the repairs were done in-shop in less than a day, at no charge to me.
I have no complaints about Apple’s products and nothing but praise for their customer service. As a matter of fact, they even replaced one of my old iPods after the warranty had expired and I took it swimming (I was pushed into a pool), FOR FREE! The guy at the Apple store just filled out some paperwork and off I was with a new 4th Generation iPod and they kept my old 3rd Generation one. The Apple employee marked it down on some form as it was “overheated,” a well-known problem with that generation. From that day forth, Apple has a customer for life.
It sounds like you got a really bad employee, because you do not have to get a new contract to buy a replacement phone with AT&T, or any cellular provider. You might have to if you want to get a discounted price on the phone, but not if you are paying full price.
(Libertarian disclaimer: I’m not saying this practice should be illegal–I’m sure it was included somewhere in the print that I should have read at some point before buying my phone. I’m just saying it’s sleazy, and deserves some public shaming.)
I don’t think you need this disclaimer. In fact the Libertarian model is being put into perfect practice by your post. You, as a private citizen, are simply exercising your right to complain. And you should! This will then cause others to consider another option for their wireless purchase. Thus, if AT&T continue to be sleazy, they will lose market share. No regulation from D.C. is needed. Go Market Forces!
Concerning the rebate, the wife and I have received about 6-7 rebate debit cards ranging from $25 to $100. In the case of the lower value ones (below $50), we make sure to go somewhere we know we’ll spend more than that, like to a nice restaurant, and then tell the waiter to split the bill (put the amount of the debit card on it and the rest on one of our credit cards). That way we ensure that we use every penny. For the higher values, we write the amount left on the signature panel (next to our signatures) and use them again for that amount the next time we purchase something higher than that value. It’s about 5 seconds of work, but you get to use every penny.
As for it not working in some places, I don’t know. All of ours have been rebate Visa cards and they’ve worked everywhere we’ve tried them.
“Libertarian disclaimer: I’m not saying this practice should be illegal–I’m sure it was included somewhere in the print that I should have read at some point before buying my phone.”
Yeah, but it’s exactly this kind of behavior by corporations that allows people like Ralph Nader and Naomi Kline to make a name for themselves.
Apple ain’t the problem here. There are many things you can complain about Apple for (too expensive, closed systems, cult-like), but poor customer service isn’t one of them. In fact, here’s a link to a new story about Apple sticking up for a customer in a dispute with AT&T: http://consumerist.com/tag/returns-and-exchanges/?i=5024897&t=exchanging-a-defective-iphone-3g-is-a-huge-pain-in-the-butt
Come on, Radley, you believed them? Make them show you the line on the contract that *you* signed that says you have to get a new contract. Seriously – you have three days to cancel this contract, don’t let them get away with it.
Ob story: When I moved to TN years ago from IN, I had cell service in both places. I started service down here about two months before making the move. They botched my address and I never got a bill. In the course of moving and all that, I didn’t even think anything about it.
Got down here, back from 3 weeks overseas and found my checking account had $250 missing, and the stupid little cell phone store where I had signed up was the culprit. Called them up and found out that the account had been closed due to non-payment, and they were getting their money out of me. The provider was also billing me for $250, so it would have been $500 altogether.
So I straightened things out with the provider, payed the money that was owed for the two months that were missed, and thought it would all be fine.
It wasn’t.
I called the reseller and they wanted me to sign a new contract with them before they would refund the money. I didn’t even ask to speak to a manager, the lady had a fairly impressive title and pissed me off. I threatened to just get the charge reversed and she laughed and said everybody tries that but it never works.
So I went to the bank with plenty of documentation and got the charge reversed (my bank got bought in the mean time, and I had closed the account, so that’s another story in and of itself).
After having the charge reversed, I called back, spoke to her manager and let him know they would be seeing a reversed charge, and congratulating them on that. He was very apologetic, and would have probably fixed things had I just talked to him on the first call.
Anyway, long story, but *never* believe these people. The sales guy that you talked to probably pocketed a commission for getting you on a new contract.
Ditto the guy who mentioned the GSM cards. My wife washed my phone in the laundry in January. I knew I wanted an iPhone, and my plan didn’t expire until March. So I went on eBay and got a super-cheap Motorola F3 phone. Paid all of $50 for the thing. By the time March rolled around, it was clear that the 3G was coming out, so I waited, getting my new iPhone 3G on Friday.
Frankly, given that AT&T uses GSM cards, I’m a little surprised you didn’t try the eBay route…
Speaking fo cell phone companies can anyone tell me a company that is not one (or part of one) of the companies that highjacked the 4th Amendment and rule of law by purchasing the new FISA bill? My contract is up with verizon and I can’t give those bastards another dime. Anyone any ideas?
Mike Leatherwood:
I use Virgin Mobile also. Check your TopUp’s, you might be able to reduce it to $15 every 3 months. If, like me, you’re mainly keeping it to have access to a phone, and never use all the money you’ve got, it can save you a bunch. I also like that they never clean out your money. Once you’ve paid it in, it’s in your account.
Hey Radley, Here’s a pointer:
Option #1
Go to Frys or your local discount electronics retailer. Get a “Go Phone” no contract. Put your current SIM card into this phone (or get a replacement if yours is lost/destroyed) and voila– works fine. Fry’s sells these phones for $15-50. T-Mobile gave me a free SIM replacement, though AT&T may charge $20 for a replacement.
Option #2
AT&T sells refurb go phones on their website. I was able to get my GF a $250 flip phone w/ color front screen, camera, video, etc for $15.
Bottom line is if you are mid-contract and you need a new phone, just pop a contract SIM card into a go-phone and save yourself a few hundred dollars.
Nick T: The word seems to be that of the major telecomms, the only clean ones in terms of not cooperating with the warrantless wiretaps are T-mobile and Qwest. (But not Qwest’s cell service, which is someone else’s rebranded.) In terms of donations, I don’t know.
If it helps, the Iphone really is way cool. I love mine.
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[...] Shaming AT&T If I want the iPhone, I’ll have to pay $200 to break my service contract, which would basically put the cost of the phone at $400. [...]
Re: Your libertarian disclaimer.
I think this is one of those areas where libertarian theory starts to break down. Our theories assume customers avail themselves of all relevant information before purchases, but they often don’t (cross-apply this to health care, where even at Cato – intellectual home of Health Savings Accounts – we often used our HSA cards for alcohol, pizza, and Xmas gifts (and books, too, to our credit)). And given that there simply isn’t any cell carrier that doesn’t have the same form of fine print, non-negotiable sales contracts, unless one consents somewhere it’s impossible to have cell service. And there is very little bargaining power from the consumer’s standpoint (at least after the K is formed, and not much beforehand), especially consumers who don’t have an extra $200 to break contracts).
I’m not sure what the answer is, or that any government regulation could improve on the market outcome, but I don’t think it’s unreasonable to call this a market failure. Maybe that’s not libertarian, but I’m not sure it’s wrong, either.
Uh, Radley……AT&T was bought out by Cingular, and when Cingular successfully destroyed their own credibility, they changed their name back to AT&T……and you should’ve used your rebate cards at any grocery store……you do buy groceries, don’t you? You won’t have a problem…….no need to get the lawyers involved…….
#7
The original iPhone was not subsidized. The new one is. They allowed people to upgrade without a penalty, because you paid the full price of the phone. Since it cost AT&T nothing, it was easy to allow it.
The new iPhone IS subsidized, however, and with a few hundred bucks out of AT&T’s pocket every time someone picks one up, I don’t blame them for asking you to sign a new three year deal.
I’m waiting until the intitial wave of excitement is over before I upgrade anyway.
#26
I almost agree… except, as a libertarian, I wouldn’t demand a law to prevent the card. I would, however, allow the rebate customer to bring a suit (class action?) against AT&T, based on the premise that “rebate” is generally accepted to mean a check in the mail….
AT&T should make it clear at the time of purchase that their rebate comes in that form.
I had the same problem -> http://getanewbrowser.com/2008/07/not-cool-att-not-cool/
But Brian, you’re just explaining why AT&T is doing what they’re doing. Radley was still told what he was told and AT&T should honor that within a reasonable period of time. I-phone has not been out that long.
#23, thanks for the info. T-Mobile huh? I’ll give them a look.
Lawsuit as ex post remedy is a classic libertarian rejoinder to a claim for ex ante regulation. But it assumes that an average Joe has the time and resources to pursue a lawsuit against a giant phone company over a couple hundred dollars. Class action suits aren’t the easiest thing in the world, and most people just can’t bother with them (plaintiffs in such suits rarely see the benefits anyway; lawyers make the scratch from class actions). I’ve always been skeptical of the nonchalant way in which libertarians throw around civil suits as the answer to all wrongs (Rothbard, I think, used the idea as the means to settle claims to property rights in air). It’s not entirely clear to me that ex ante regulation can’t achieve better results in some areas.
Also, I think most cell contracts have a mandatory arbitration clause, which make a civil suit more difficult still. I’m not really sure how enforceable they are in practice, but it’s one more thing the consumer has to deal with. Most people just pay the termination fee and go somewhere else.
Radley,’
It pays to buy insurance so if you lose the cell or it is broken, it is repalced quickly. The cell phones are so easy to break or maim or lose. $50 to replace my phone and it came overnight by FedEx. I did not have to sign a new contract- mine continues- I did not upgrade- that is when you need to sign a new contract-I have Verizon.
Call and ask for a supervisor- be the will make a deal with you.
#28 – It would still make sense for AT&T to let a consumer extend, rather than break, their existing contract to get an iPhone at the subsidized price. Yes, they lose the $200 bucks (the early termination fee) but they more than make that up with two years of data plan (which they no longer split with Apple, btw).
I wonder what Apple thinks about that… they gave up their exclusive royalty payments estimated at 12 to 18 bucks a month so that AT&T would subsidize the phone, and now AT&T isn’t giving the subsidy to all comers.
“I was told today that that’s not the case. If I want the iPhone, I’ll have to pay $200 to break my service contract, which would basically put the cost of the phone at $400. Now if that was the case all along and I’d been told as much, I’d have no complaint. I’m just pissed that the sales guy lied to me.”
Always, always get whatever they say/promise in writing with a signature and date. Always.
George Carlin said,”the man who coined the phrase let the buyer beware was probably bleeding rectally at the time.”
Not been screwed by a phone company yet, partially since I still have my cell phone from 2002 and I haven’t switched companies since GTE (okay now Verizon). But did have a bad experience with Avis and won’t be using them anymore. They charged me an extra $800 that was no where listed that I would be charged … long story I wont’ go into but Avis refused to even talk to me. Hugely awful customer service and I ended up just complaining to the Better Business peeps. Didn’t get my money back, but I did what I could. And I tell everyone I can to stay away from Avis. They will rip you off.
Actually as I see it, every company will rip you off if given the chance. (shrugs)
I have a phone. All I want is a SIM card that I can fill-up now and again. But I don’t want to pay more per minute for less service, have to maintain any balance above zero, or worry about using it often enough. After all it costs nothing to keep the account open on their computerized books, charge me a non-discriminatory price for their public service, and keep an electronic record. And, of course I want to be able to check the balance in my account (accurate & current) and top-off without extra charge.
Plain vanilla communication service.
No one will sell this “plan” in the USA (although you can get it in Europe proving it is technically and economically possible).
It would sure be nice if I had more than just a few cellular companies to choose from. It feels like I am stuck with a few choices that all seem to intangibly join powers to cost me a lot of money for bullshit. Obviously, I wouldn’t go as far as to say any cell company has any kind of monopoly on the market, but it sure would be nice to have a few other choices that I could give my business to other than Un-American, domestic spying ATT. I guess Ill try T-Mobile if they are verifiably not included in the wiretapping immunity mumbo-jumbo.
Dan – Sprint, Alltel, T-Mobile, AT&T, Cricket, Verizon, and dozens of niche/pre-paid services that run on the Sprint or T-Mobile networks. There’s lots of choices for wireless service… now try to find a high speed Internet carrier you like when there’s only two (max) per metro area.
Why woudl you give your business to a company that gives your information to the government without a warrant? Makes no sense. As soon as I heard about what the telecoms were doing, I dumped Verizon.
So, about these phones e.g. Net10, like those mentioned in #2 — can they take incoming calls? How does that work?
I have a T-Mobile prepaid phone and it’s just great. It’s ten cents a minute if you buy your minutes blocks of 1000 and they’re good for a year. I’ve had this service for three years now and my total cost for service has been $300, $100 a year. Some of my co-workers pay $50 or more a month and then complain because they never even come close to using their minutes. It’s a tremendous waste of money. If you use less than 300 minutes a month and don’t do a lot of texting, T-Mobile prepaid is hard to beat.
I lost my original prepaid phone late last year. I went to the T-Mobile store and, after a short pitch on signing up for a contract, they told me to pick any phone I liked and pay the “invoice price”. I picked a low-end RAZR and it cost me $140 plus tax, that’s it.
The only thing I don’t like about this service is that you can’t get internet on the phone. In fact, I don’t think that any of the pre-paid services offer internet access. There are occasions when I’d like to whip out the phone and check a web site or two, but that convenience isn’t worth the tremendous extra cost of a monthly cell phone contract.
“I think this is one of those areas where libertarian theory starts to break down.” …
I agree for the most part. The theory requires a significant percentage of consumers to know their options, and to make the hard decisions when they need to. Since all cellular companies play the BS game, a large percentage of customers would need to stop giving them money until they get their act straight. But when 95% percent of customers just pay them and put up with it, they have no incentive to change. I guess the theory is good, but the implementation is poor because not enough people adhere to it.
Also, until the lawmakers do away with all of the mountain of fine print that shows up in the simplest contracts, we will continue to see companies take advantage of their almost limitless (compared to the average customer) legal resources. Again, if enough consumers refused to enter into agreements that require a law degree to understand, things would change, but 95% of us just sign on the line and hope for the best (myself included)
You missed the elephant-in-the-room libertarian issue: the spectrum over which cell phones work is regulated and doled out by the government in a way that artificially limits the amount of carriers that can compete. Limit competition and you get high prices and shitty service. There is no intrinsic reason why the spectrum needs to be regulated – “interference” is all relative, and with enough technology, you can broadcast anything anywhere without the consumer realizing the hoops that the device has to jump through to avoid interference. Search around the internet for articles on “open spectrum” and you’ll realize the reason why many telecom products are so shitty and expensive.
I live in the outback of the west. ATT has been my most excellent provider for over 10 yrs now.
They dumped the CDMA equipment this Jan, so I was forced toget a new phone. No big deal, except that it was two months before I hit the road only to discover I have almost zero service along the area I travel!
Verizion users of course can hit the call button almost anytime and get connected. Even in my home town with a tower within three miles on a hilltop, the norm is for calls to be dropped constantly!
AT&T=A$$Holes!
I have been using Virgin Mobile for several years now. I have no contract and I generally spend less than $30 a month… and I never spend it for minutes I don’t use.
I’ve never spent more than $20 on the phone itself.
At one point I lost my phone. I called them and they immediately froze my account so that whoever might find the phone couldn’t use it. They then sent me a (refurbished, not new) phone via overnight delivery for the cost of the delivery only, no charge for the phone.
When I logged on to the website to change my service over to the new phone I did not have to search for how to do it, I was taken directly to a page that said “Sorry to hear you lost your phone. You’ll want to do either A (a link) or B (another link).” Within an hour my new phone was up and flying and the only large hassle was getting all my stored numbers back.
If you want a phone that does your dishes and makes you sexier, go for some large, expensive phone and contract. If you want to make and receive calls, get voice mail, and maybe text some, pay as you go is the way to do it.
Agreed that mail in rebates are just a way to screw you out of money. I’d never heard of this card thing as payment. I guess thats just one more bit of fine print we’ll have to read. Of course 99% of the time I’m not willing to go for anything with a rebate as they almost never work.
As far as the card itself goes, that setup is pretty standard. Visa gift cards work exactly the same way. Most if not all registers will reject the entire sale if you try to charge more than the current balance. Its just a corner they cut as far as maintaining a database goes.
They all have an 800 number on the back of the cards to find out how much is left. Honestly the best way to do it is to track how much you’ve spent on the card itself. I just sharpie the remaining balance on the card as I go, whenever I’m stuck with one of these.
Many cashiers don’t know how to deal with these cards, but if you get one thats worth their salt they’ll call the 800 number for you at the register and run the appropriate amount through. True that this is kind of a waste of everyones time, but its not the end of the world.
I will say that its yet another way for them to screw you out of rebate money. I wouldn’t be shocked if the cards had an expiration date…
Hubby went in to ATT store last night with my $100 rebate card from my Blackjack II. He was getting new 3G iPhone and they REFUSED THEIR OWN REBATE CARD. I am just livid about this.