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.

By Aimee Picchi May 24, 2013 12:49PM

Pedestrians walk by an AT&T store in Times Square on February 21, 2013 in New York City (© Ben Hider/Getty Images)

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. 


More on moneyNOW


41Comments
May 24, 2013 1:27PM
avatar
I am an ATT customer and I am very upset that they can change the fees in the middle of my contract.  It is not the amount, it is the principle.  I sent an email to them on their website about a week ago to complain and asked for this fee to be removed until my contract expires.  So far, no response.  I hope that they will get enough heat from their customers to remove this fee at least until current contracts expire.   
May 24, 2013 1:32PM
avatar

"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.

May 24, 2013 3:47PM
avatar
Having people sign a contract and then amending the contract by adding arbitrary fees should be a legitimate reason to break your contract without fees. Because AT&T is part of the telecommunication duopoly they have lots of power to enforce whatever they want with out facing repercussion. The FCC is a joke and is a puppet of AT&T and Verizon instead of being the agency charged with regulating them. The only solution is to break up AT&T and Verizon into 6-10 different companies in an Anti trust case but this sadly will never occur
May 24, 2013 1:22PM
avatar
sleaze by another name is still sleaze. oligopolies are consuming most of the service companies in the united states.
May 24, 2013 3:00PM
avatar

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 !

May 24, 2013 4:32PM
avatar
AT&T has been doing this crap for years.  I used to be a diehard customer for more than a decade, until they jacked up my per-minute long distance rate without telling me back in the 90s - they increased it by 25%.  When I called to complain, they didn't seem to care, so I switched to someone else.  Oh, by the way, the company I was working for at the time was giving AT&T about $65k worth of business every month, and I convinced them to switch, too.  AT&T telemarketers kept calling wanting me to switch back (this was before the do not call list) and I had a lot of fun reaming out their company every time they called.  When you tell a telemarketer that you hate their company so much they could give you free service for life and you still wouldn't switch back, it pretty much nullifies whatever sales pitch they might have.  It's been 15 years, and I still say -  FU AT&T.  I will NEVER do business with your company again.

May 24, 2013 2:41PM
avatar
exactly, vote with your feet.  I just found out T-Mobile is also a GSM cell provider, and my $145 bill for two cell lines with AT&T can be changed out with a comparable plan with T-Mobile for $80, and we can continue to use our iphones.  Just check the cost of cancelling your contract first, my cost is over $400, that will go down $20/mth for two contracts, so we will wait a year or so, then make the switch. Check out Virgin Mobile if you're a Verizon user, much cheaper.
May 24, 2013 3:28PM
avatar

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.

 

May 24, 2013 3:59PM
avatar
Well, I am at the point of selecting a cellphone carrier, as my current contract is over.   ATT will NOT be among my choices, nor will any of the others who charge similar fees.  And, BTW, how much is the take-home pay of the CEO and his henchmen?  ATT, go F Urself.
May 24, 2013 4:11PM
May 24, 2013 3:40PM
avatar
Gee, it's nice to know that SPRINT isn't the only sleezy wireless company out there, but they are still in the #1 postion, especially since they are offering new customers cheaper phones than their "loyal" customers.
May 24, 2013 1:09PM
avatar
Nothing in Stephenson's regime surprises me.
May 24, 2013 5:21PM
avatar
Why is this such a crooked industry?
May 25, 2013 10:45AM
avatar
And congress is out there to defend corporate America, not the American people!!!!
May 24, 2013 8:04PM
avatar
Everything about AT&T is sneaky.  They stopped being a decent wireless carrier when they stopped being Cingular.
May 24, 2013 1:27PM
avatar
If you don't like what a carrier charges you, switch carriers next time. They are all out to make a profit.
May 24, 2013 4:19PM
avatar
Check into U.S.Cellular. Smaller company, fair costs, great customer service.
May 24, 2013 5:14PM
avatar

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.

May 24, 2013 8:39PM
avatar
I have had both AT&T and Verizon service. I got sick of paying for their ridiculously overpriced services. I switched to Net10 and have unlimited talk, text, web and GPS all for under $50 a month. I have all the services that my wife has with her Verizon IPHONE at less than half the price and my reception and call quality is just as good. 
May 24, 2013 6:32PM
avatar
Good thing I don't have any ATT items including LD connection charges. I quit them when they broke up the original ATT.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

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.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The major averages punctuated a solid week with a subdued Friday session. The S&P 500 shed 0.2% to narrow its weekly gain to 1.7%, while the Nasdaq Composite (+0.1%) displayed relative strength. The tech-heavy index finished the week in line with the benchmark average.

Market participants went into today's session expecting to hear some new insight from Fed Chair Janet Yellen, who delivered the keynote address at this year's Jackson Hole Symposium. Unfortunately, the ... More

MSN MONEY'S