AT&T adds sneaky fee onto its wireless bills
The telecom giant now levies a monthly 61-cent 'administrative' charge that will bring in millions in revenue.
Updated 2:05 pm ET.
What might be nickels and dimes for you will end up as hundreds of millions for a corporate giant. Just ask AT&T (T), which has put into play a sneaky new fee.
The telecom giant this month is adding a 61-cent "below-the-line" charge to the bills of its wireless contract customers in a move that could bring in more than $500 million of new annual revenue, The Wall Street Journal reports.
Such fees earn their names for their placement at the bottom of a phone bill, where companies hope customers will overlook them. After all, what's profitable for wireless carriers isn't necessarily well liked by either consumer groups or the companies' subscribers.
Several customers have already posted complaints on AT&T's forum. One wrote that the stealthy charge, which AT&T is calling an "administrative" fee, is "baloney" and simply another way of increasing costs to consumers. Sixty-one cents "doesn't sound like much, but some people have multiple lines," one customer wrote, adding that it's a "dishonest price hike."
AT&T defended the decision by telling CNET that the new charge is similar to fees from other carriers. A representative added that the fee will "help cover certain expenses, such as interconnection and cell site rents and maintenance." Also, the carrier says it had sent out notices to wireless customers a month before the new fee went into effect.
That's not going over well with some customers, who point out that their monthly service charge should cover AT&T's cost of offering the service.
AT&T is right about other carriers charging similar fees. Verizon Wireless (VZ) adds an administrative fee of 90 cents per line, while Sprint Nextel (S) levies $1.50 per customer, The Wall Street Journal points out.
Public Knowledge, a consumer watchdog group, criticized AT&T's new fee as a price increase and attributed the trend to a lack of competition and lax regulators. As Public Knowledge senior staff attorney John Bergmayer told the paper: "Imagine if McDonald's advertised hamburgers for 75 cents but then required you to pay a $3 bun fee."
Follow Aimee Picchi on Twitter at @aimeepicchi.
- Oklahoma senators change tune on disaster relief
- At software giant SAP, autism is an asset
- McDonald's unveils highest-calorie item ever
"AT&T defended the decision by telling CNET that the new charge to fees from other carriers"
Well ... the NAZIs killed Jews, homosexuals, the disabled, and other undesirables ... so it's ok for us to do it to. Sincerely, AT&T.
Like it or not, the "well other people are doing it" defense is NOT a defense.
By any other name a rate INCREASE ! Typical cooperate way to exploit the system. Regardless of cost of doing business increases. IT IS A RATE INCREASE !
I was grandfathered in to a great phone plan with AT&T for several years. I got tired of the little fees going up and up. I canceled and now have AT&T go phone. This plan has stayed the same now for two years. I will never us their phone service again. I also was done the same by having Directv thru my AT&T plan. I changed to dish then they offered me the mooon. I am stuck with a house phone thru them for I have to have it for my husbands pacemaker. However this bill keeps increasing with their little fees. So sick of them.
I Europe they tell you up front the total cost out of pocket of using a cell phone per month, and it’s a lot cheaper than in the USA with all those hidden charges.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The major averages began the new trading week on a slightly lower note with small caps leading the weakness. The Russell 2000 shed 0.3% while the S&P 500 slipped less than a point with six sectors ending in the red.
Equity indices began the day in negative territory with only the Nasdaq (-0.04%) making a very brief appearance in the green. After sliding through the first hour of action, the major averages reversed and spent the remainder of the session climbing off ... More
More Market News
Like many companies this winter, the fast-food giant blamed a drop in same-store sales on the weather. But could its problems be bigger than a snowbank?
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'