AT&T Sends Material Change Disputers to Debt Collectors

AT&T, over the past month, has begun sending (at least) hundreds of customers who disputed the Material Changes to the Terms of Service, to debt collectors.

This year, AT&T has made two significant modifications to the terms of service. One changed modified the terms of binding arbitration, making them more favorable for AT&T. The other change disregarded the FCC Comcast/BitTorrent ruling, and imposed non-net neutral terms on customers. Of which, customers are explicitly prohibited from broadcasting video, with services such as Qik. Normally, under rules established by CTIA (which all carriers agreed to), customers should be allowed to be released from their contracts, should they chose to disagree with these changes.

The company failed to provide PhoneNews.com, following our previous reporting, with when exactly it informed customers that AT&T only believed there were two possible material changes which could be made to the terms of service. AT&T now says that it believes that there are only two possible changes to the Terms of Service, which they believe are material; either a reduction of service in your area, or a reduction in airtime minutes on your plan.

As such, consumers were left with a painful decision: Either accept the terms, or cancel service and refuse to pay the termination fees… leaving negative balances, and the fear of debt collectors.

As of our previous reporting, AT&T confirmed that it was “not aware when this added interpretation was relayed to customers.” But that it was “researching, and would get back to us.” Months have passed with no answer, despite repeated requests from PhoneNews.com and others for their promised explanation.

With AT&T’s lack of response, and zero information in the Terms of Service that would corroborate such an unconscionably small interpretation, AT&T appears to be taking the gloves off to enforce its newfound terms.

Specifically, the company is not waiting for an FCC ruling, on any consumer complaints regarding the disregarding of its material change clause. Instead, it is serving those customers with debt collectors.

Customers in this class are being called by debt collectors, and we have received multiple reports that some of AT&T’s debt collectors are even choosing to violate the Fair Debt Collection Practices Act. While that’s no surprise to consumer advocates at PhoneNews.com, the matter continues to be compounded.

PhoneNews.com continues to encourage customers who disagree with AT&T being able to materially change their material changes clause, retroactively, to file an FCC complaint.

Even if you were unaware of these changes, and are now locked in to the Qik-banning, arbitration-bending clauses, an FCC complaint helps inform the FCC that this problem is serious, and how you felt about being told you couldn’t cancel service if you disagreed. Per our stopwatch, an FCC complaint only takes 10 minutes to file.

Christopher Price is the Founding Editor of PhoneNews.com. Today, he leads the team building Console, Inc. - a new kind of Android™ device. He still likes to pontificate... a lot. You can visit his personal blog at ChristopherPrice.net.

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12 responses to “AT&T Sends Material Change Disputers to Debt Collectors”

  1. Jay

    i’m sorry but I tried the FCC complaint. and that was a FAIL! All FCC did was foward my complain over to AT&T where I got a letter stating that these do not alow me to cancel with no ETF. But I have canceled them recently hopefully they dont send me to Collections.

  2. SaltyDawg

    Everyone should take action here (and spread the word. The hard part is already done for you (it emails the FCC and all of your local congress reps).

    Read the page:
    http://www.freepress.net/freemyphone

    Sign the petition (which emails the FCC and your local congress reps):
    https://secure.freepress.net/site/Advocacy?cmd=display&page=UserAction&id=333

    Follow it on Facebook:
    http://www.facebook.com/pages/FreeMyPhone/89600309468

    Follow it on Twitter:
    http://twitter.com/freemyphone

    Follow the RSS feed:
    http://www.freepress.net/taxonomy/term/5718/feed

    Everyone should be posting those links all over the internet. This is a well organized, well funded movement. The more people supporting it, the less likely we’ll be reading stories like this in the future. Do your part…

  3. Dr. Z.

    If you get a letter from a debt collector in this matter, send them a cease and desist letter immediately, so the firm does not appear on your credit. A sample of this letter and more info can be found here: http://www.bendover.com/cdletter.asp

  4. Bo

    We should also try starting arbitration process with At&t Wireless. The details are at http://www.wireless.att.com/answer-center/solutionDisplay.jsp?solutionId=KB72565. First you send a notice to At&t notifying them you want to start an arbitration. They will try to resolve it. Then if you are not satisfied you can start a demand for arbitration. At&t will pay the arbitration fee and I believe we have nothing to lose, except fees for mailing documents. Once it’s in arbitration, we have the chance to show the arbitrator that this does hurt us.

  5. Christopher Price

    Part of the problem with arbitration is actually a material change itself.

    AT&T claims they can (retroactively) now require you to pay their fees, if you lose in arbitration. That’s one of the two material changes that people wanted to cancel over.

    Of course, AT&T will claim that they can enforce that term, so they will probably demand you pay their fees if you lose.

    And, of course, AT&T’s arbitration fees will probably exceed the ETFs (stretching into the thousands). As such, I don’t think you’ll have much luck with arbitration, since there will be a disagreement from the get-go as to who pays arbitration fees in the event of a loss.

  6. Bo

    I’m not familiar with arbitration. According to this link http://www.wireless.att.com/answer-center/solutionDisplay.jsp?solutionId=KB72565, there is “AT&T will not attempt to collect from you the attorneys’ fees it incurs in arbitration even when permitted to do so under applicable law” and “For any non-frivolous claim that does not exceed $75,000, AT&T will pay all costs of arbitration, no matter who wins” and “Send the final two copies of the Demand for Arbitration to the AAA Case Management Center for the state in which your billing address is located. Please be sure to include the appropriate AAA filing fee. We will promptly reimburse you this amount when we receive a copy of your Demand for Arbitration, unless your claim is for greater than $75,000.”. Thus it appears to me that we have nothing to lose in an arbitration, since At&t pays the fee and does not asks for its attorney fee from us. Did I miss something?

  7. Christopher Price

    We’ll double check, but that FAQ may be out of date from the February and March changes. It certainly wouldn’t be the first time an AT&T FAQ wasn’t months (or years) out of date.

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  9. Update

    Read this:

    Although you did sign a contract and they changed the terms of the arbitration; You also signed a contract which states the following:

    “AT&T T&Cs said:
    We may change any terms, conditions, rates, fees, expenses, or charges regarding your service at any time. We will provide you with notice of such changes (other than changes to governmental fees, proportional charges for governmental mandates, roaming rates or administrative charges) either in your monthly bill or separately. You understand and agree that State and Federal Universal Service Fees and other governmentally imposed fees, whether or not assessed directly upon you, may be increased based upon the government’s or our calculations. IF WE INCREASE THE PRICE OF ANY OF THE SERVICES TO WHICH YOU SUBSCRIBE, BEYOND THE LIMITS SET FORTH IN YOUR RATE PLAN BROCHURE, OR IF WE MATERIALLY DECREASE THE GEOGRAPHICAL AREA IN WHICH YOUR AIRTIME RATE APPLIES (OTHER THAN A TEMPORARY DECREASE FOR REPAIRS OR MAINTENANCE), WE WILL DISCLOSE THE CHANGE AT LEAST ONE BILLING CYCLE IN ADVANCE (EITHER THROUGH A NOTICE WITH YOUR BILL, A TEXT MESSAGE TO YOUR DEVICE, OR OTHERWISE), AND YOU MAY TERMINATE THIS AGREEMENT WITHOUT PAYING AN EARLY TERMINATION FEE OR RETURNING OR PAYING FOR ANY PROMOTIONAL ITEMS, PROVIDED YOUR NOTICE OF TERMINATION IS DELIVERED TO US WITHIN THIRTY (30) DAYS AFTER THE FIRST BILL REFLECTING THE CHANGE. If you lose your eligibility for a particular rate plan, we may change your rate plan to one for which you qualify.”

    Here’s the other problem. You are canceling because:

    “ChieflandFL said:
    I am cancelling two lines of service with AT&T and moving them to Verizon because of the horrible reception and lack of customer service both in store and on the phone.”

    If you really had a problem with the arbitration clause you should have called that day you received it and maybe they would have worked with you. However since you are complaining about the lack of reception and customer service you should have canceled within your first thirty days.

    You are better off just paying the ETF than trying to fight this and paying arbitration costs. You signed a legally binding contract that obviously states you are currently in the wrong.

    The first part actually applies to your article. The new arbitration clause is not a phyical change to the contract and therefore does not warrant a waive of the ETF.
    Your directing consumers to ruin their credit history, AT&T will not budge, and FCC will not change anything because it’s legal.

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