AT&T settlement over hidden fees faces objection by consumer

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Update:

• An AT&T customer objected to a proposed $14 million class action settlement agreed to by the company to resolve claims it charged its customers an improper fee. 
• The objector argues the class action settlement allows AT&T to continue charging what it calls administrative fees and does not address a “core issue” of the complaint. 
• Objector Eric Hughes argues the class action settlement does not fix AT&T’s alleged lack of transparency about the fee, its location on the billing statement and the alleged deceptive nature of its description on the company’s website. 
• Customers accused AT&T of misleading them, and making hundreds of millions of dollars in profit, by telling them the administrative fees were legitimate surcharges. 

(June 17, 2020)

A judge has rejected AT&T’s attempt to dismiss a class action lawsuit challenging the company’s so-called bait-and-switch pricing scheme.

Magistrate Judge Laurel Beeler stated that despite the company’s protestations, Ian Vianu and Irrina Bukchin could sue the company while still being current AT&T customers.

The customers claim AT&T had wrongly tacked an administrative fee onto the advertised rate, yet AT&T responded that the customers could not complain because as customers, they are aware of the fee and are locked into a contract.

However, the judge determined this should not prevent them from taking legal action.

AT&T made its move to have the claims dismissed in March of this year. The judge did decide to dismiss some of the customers’ claims, but not the entire bait-and-switch pricing class action lawsuit.

“It seems a funny position to require plaintiffs to break their contract to challenge unfair practices about fees for their services,” Judge Beeler said. “The contracts are long-tern contracts, and breaking them comes with a penalty.”

According to the judge, they could still renew their plans with AT&T and make claims for injunctive relief. 

Additionally, Judge Beeler said the company’s choice to charge the fee in question as a pass-through fee instead of a monthly cost then rendered its contract moot. That contract was allegedly the one preventing customers from suing over bills charged more than 100 days previously.

The company argued the customers were additionally barred from suing because they had not honored the 100-day period in which they were not allowed to bring forward legal claims.

However, Judge Beeler felt differently, saying customers had sufficiently argued that the company misrepresented an administrative fee as a pass-through cost. 

Allegedly, the 100-day limit could have been honored if the company had just charged a monthly fee that was disclosed.

AT&T attempted to say some claims should be barred based on the statute of limitations, an argument Judge Beeler largely rejected.

In the judge’s view, each new bill a customer incurred had its own limitations period, whereas AT&T had attempted to lump the bills together to claim they were beyond the statute of limitations. 

Judge Beeler did trim some claims from the AT&T bait-and-switch class action lawsuit. The judge did not allow customers to claim that the fee itself violated California law, and did not allow customers to make claims against the company before the 2018 identification of the fee in question. 

The customers filed their AT&T bait-and-switch class action lawsuit in June 2019. They had claimed the carrier advertised a monthly price, based on which the customers decided to sign up for service. However, this allegedly turned out to not be the only fee they were charged. 

According to the customers, AT&T then began charging an additional fee in 2013. The company allegedly called this a pass-through fee, but according to the customers, it was really an administrative fee from which the company profited. Allegedly, the fee rose from 61 cents to $1.99 per month over the course of five years. 

The customers say the company advertised one lower price to entice customers to sign up for service with the company, but then required customers to pay more than what was advertised by tacking on fees on top of the base rate. Customers asserted that this scheme yielded “hundreds of millions of dollars” of profit for the company.

The AT&T customers then went on to say it was no accident the fee was hard to spot — the company supposedly intentionally hid the fee from view in online billing, to avoid customers from identifying the full cost of their service. Allegedly, many customers would not have chosen AT&T’s service had they been aware of the full cost.

Have you ever been affected by what you believed to be a bait-and-switch pricing scheme? Share your experiences in the comments below.

Vianu and Bukchin are represented by Michael W. Sobol, Roger N. Heller, Sarah R. London and Avery S. Halfon of Lieff Cabraser Heimann & Bernstein LLP; and by Daniel M. Hattis and Paul Karl Lukacs of Hattis & Lukacs.

The AT&T Bait and Switch Pricing Class Action Lawsuit is Ian Vianu, et al. v. AT&T Mobility LLC, Case No. 3:19-cv-03602, in the U.S. District Court for the Northern District of California.[/vc_column_text][/vc_column][/vc_row]