‘AT&T’ Faces Class Action Over Undisclosed “Administrative Fee”

AT&T has been slapped with a class action after alleging failing to disclose a $1.99 administrative fee to its customers.AT&T denies the allegations. Photo: Mike Mozart | Flickr | CC BY 2.0

Telecom giant AT&T is in the center of a class action suit that alleges the company of charging customers more than their advertised rates. The complaint claims that the carrier has been charging an undisclosed $1.99-per-month “Administrative Fee.”

The lawsuit was filed by AT&T customers Ian Vianu and Irina Bukchin, and they are now seeking to raise the complaint to a class action that includes customers who have been fraudulently and sneakily charged by the company from in California. An injunction has also been filed to compel the company to stop charging clients with the contested Admin fee, and as well as an order forcing AT&T to pay damages, restitution, and legal costs to the class.

According to the complaint, the company is prominently advertising a monthly flat rate for all their postpaid subscribers, and the almost-two dollar fee is undisclosed in all their ads.

“AT&T prominently advertises particular flat monthly rates for its post-paid wireless service plans.” But after customers sign up, the telco “covertly increases the actual price” by tacking on the “bogus so-called ‘Administrative Fee,” reads the lawsuit filed Thursday in US District Court for the Northern District of California.

They hide the charges deep down the bill

The lawsuit alleges that the telecom giant is purposely hiding the charge in parts of the bill that are hard to find for users to have a hard time of noticing that the charge exists.

“Making matters worse, AT&T deliberately hides the Administrative Fee in its billing statements. In AT&T’s printed monthly billing statements, AT&T intentionally buries the Administrative Fee in a portion of the statement that: (a) makes it likely customers will not notice it; and (b) misleadingly suggests that the Administrative Fee is akin to a tax or another standard government pass-through fee, when in fact it is simply a way for AT&T to advertise and promise lower rates than it actually charges,” reads the complaint.

“Thus, by AT&T’s own design, the printed monthly statements serve to further AT&T’s scheme and keep customers from realizing they are being overcharged,” it read further.

The fee description is hidden “deep within” AT&T website

While the admin fee description has been included by AT&T “deep within its website,” the complaint alleges that it was designed in such a way that customers are less likely to find it.

“Not only does this description fail to constitute adequate disclosure of the Administrative Fee, but it also serves to further AT&T’s deception and scheme by suggesting that the Administrative Fee is tied to certain costs associated with AT&T providing wireless telephone services (interconnect charges and cell site rental charges),” said the lawsuit document.

Nonetheless, the complaint also says that in the event that the description listed on AT&T’s website is actually accurate, “it would merely reinforce that this undisclosed fee should be included in the advertised monthly price for the service because those are basic costs of providing wireless service itself, and thus a reasonable consumer would expect those costs to be included in the advertised price for the service,” reads the document.

AT&T costs says the fee should have decreased

The contested admin fee is not new coming from AT&T. It was first introduced in 2013 at the rate of $0.61 per month and has raised it three times. The complaint questions why the company has been raising the rate when if the company’s cost is to be considered, the rate should have decreased over time.

“Moreover, on information and belief, the fee is not tied to the costs that AT&T’s buried description suggests. This is corroborated by the fact that AT&T has repeatedly increased the amount of the monthly Administrative Fee since the fee was first imposed, while during that same time period the stated costs that the Administrative Fee is purportedly paying for (i.e., interconnect charges and cell site rental charges) have actually decreased according to AT&T’s financial statements,” the complaint adds.

“In all events, AT&T should clearly disclose the Administrative Fee and should clearly and accurately state the true monthly prices for its post-paid wireless service plans in its price representations and advertising. AT&T has failed to do so, and continues to fail to do so.”

When pressed for comments, the only response of AT&T to the lawsuit was: “The lawsuit is wrong. This is a standard fee, and we disclose it to our customers.”

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