Another day, another bogus fee from a big service provider. AT&T is facing a lawsuit due to its $1.99 “administrative fee” that increases the advertised rate without disclosing it to the customer.
According to the lawsuit, the case “challenges a bait-and-switch scheme perpetrated by AT&T against its wireless service customers.” Here’s how it works, according to the plaintiffs:
- AT&T advertises specific flat monthly rates for its post-paid wireless service plans.
- After customers sign up, AT&T charges a higher rate than the one advertised and that customers agreed to pay.
- AT&T increases the actual price of the plan by tacking on a $1.99 “administrative fee” every month for each phone line.
- AT&T buries this “administrative fee” in the monthly bill, making it difficult for customers to identify it and making it appear as though it is a tax or government pass-through fee.
- Customers who sign up for online billing do not even see this fee in the default view of the billing statements.
- The “administrative fee” is described “deep within AT&T’s website — whereby design it is unlikely to be viewed by consumers, and certainly not before they purchase their wireless service plans.”
- The description suggests that this fee is tied to certain costs associated with AT&T providing wireless telephone services but that fee has consistently gone up, while the costs of providing cell service have gone down.
- Since 2013, when the fee was first introduced, the rate has increased three times.
- The suit alleges that this is not an actual administrative fee, but rather a way for AT&T to charge higher rates without advertising higher prices.
- Through this scheme, AT&T has received hundreds of millions of dollars from California consumers.
According to Ars Technica, AT&T stated simply that the fee is standard and was, in fact, disclosed to customers.