Back in November 2016, Consumer Reports announced the results of a survey that didn’t feel like news at all: People really hate their cell phone carriers. And while feeling screwed is almost part of the deal of owning a mobile phone, Motherboard has learned, via complaints to the Federal Communications Commission (FCC) obtained by a Freedom of Information Act Request, that hundreds of irate customers literally think they’re being cheated by AT&T.
Among more than 500 complaints in the past three years, hundreds allege that the company is either changing customers’ plans without their consent, or attempting to do so by exerting pressure or promising cost savings.
These are serious allegations—because in 2012, the mobile giant settled with the FCC in a consent decree (meaning there was no admission of guilt) for $700,000 after numerous customers complained that AT&T changed their data plans without their knowledge or consent (usually away from the highly coveted unlimited data plans that are no longer offered, except to U-Verse or DirecTV subscribers).
I knew this was happening because it happened to me: AT&T switched my old unlimited-data plan when I upgraded my phone in 2016, and after all the work it took to get back on my old plan, I decided to see how many other people AT&T had done this to.
Sure enough, the list of complaints Motherboard reviewed contained more than 50 instances of customers alleging that their plans were switched on them without their knowledge or consent. These all happened from 2013 to late 2016—after the consent decree.
Here are some examples of the complaints:
“AT&T store employees switched some of my wireless phone lines from unlimited monthly data plans to 3G per month without my consent when I purchased a new phone in January 2014. They refuse to restore my original plan.”
“My Unlimited Data Plan was switched to a 10gb data plan! Neither myself or anyone on my plan changed it. ATT will not change it back, even though it was done by one of their employees without my knowledge or consent. They investigated and know this.”
“ … my daughters phone has had unlimited data since she had her first smart phone. Once before, the ATT company had changed her plan without my consent (I am the only one authorized to make changes) and we had to have it restored. It recently came to our attention that it had been switched again, without my consent.”
“I called AT&T for customer support with an iPhone voicemail issue on 5/15/16. During the call I repeatedly and explicitly told them I wanted absolutely no changes made to my plan. Upon logging into my account online I found that they had switched me off of my grandfathered unlimited data plan without permission. “
(All the customers’ personal information is redacted, so Motherboard was unable to reach out to them directly.)
When reached for comment on the sum of these complaints, an AT&T spokesperson suggested its customers utilize the company’s various tools for monitoring data usage, or switch to a newer plans that don’t incur overage charges. She also said that my own plan was switched inadvertently.
So why would AT&T do this to its own customers? As you might imagine, every unlimited-data plan is a hindrance to the company. According to Walter Piecyk, a mobile industry analyst at BTIG Research, data usage is growing, and it costs big money for carriers to provide the capacity that its customers want. And since AT&T is one of the dominant operators, increasing revenue from existing consumers is more feasible to the company than growing its customers.
“So the only way for AT&T to grow revenue is to get you to pay more [for data],” Piecyk says. “Once you buy unlimited, you don’t really need a bigger bucket. But if they sign you up for a 10-gigabyte plan, they’re gonna get more out of you when you go to a 15-, 20-, 25- or 30-gigabyte plan.” This also ensures that AT&T can continually upsell to its customers over time. AT&T could just increase its unlimited-data rates for those customers—and it has—but from a marketing perspective, upselling has the more palatable appearance of providing incremental value than a simple rate increase does.
It’s hard to know what the FCC’s criteria is for launching new investigations; its spokespeople declined to comment on how many complaints it might take, or the severity of these complaints. AT&T won’t disclose how many subscribers are still on the grandfathered unlimited data plan, but a lawsuit by the Federal Trade Commission (FTC) in 2014 alleged there were 3.5 million customers on the plan at the time.
But it wasn’t just unlimited data plans that people feel were targeted; people frequently complained of being talked into restricted-data plans by customer service representatives who assured customers that they wouldn’t exceed the plan’s data limits (but often did); or of being promised deals that came with free phones and lower monthly payments where neither the phone turned out to be technically free, nor were their monthly payments cheaper. There were plenty of stories of data use skyrocketing immediately after switching to a new plan—either from a different carrier or from another AT&T plan—resulting in data overages, usually charged at $10–$20 per extra gigabyte.
Reading hundreds of customer complaints can be a dispiriting exercise. There are sad stories of seniors or others on fixed incomes owing thousands of dollars and not understanding why, or where to turn to. Or small business owners unable to run their business. Many complaints are sloppily written, while others contain obsessively recorded details—and yes, a few are written in all capital letters. Many complaints are written angrily, and with the assumption that AT&T is purposely trying to fleece customers.
But reading hundreds of complaints also reveals what can feel like a bird’s-eye view of a company’s practices. Until August 17, 2016, on most tiered data plans when a customer uses more than their monthly allotted data, they automatically get charged $10–$20 per extra gigabyte. AT&T has 133 million wireless customers in the U.S., and it doesn’t take much imagination to realize how profitable data overages can be for the company.
Even those old unlimited-data plans seem to figure into the data grab: In hundreds of complaints, one of the most frequent terms is “throttling,” a controversial practice that mostly ended in 2015, where AT&T would slow down an unlimited plan user’s data speeds by up to 90 percent starting at just 2GB (later increased to 5GB), rendering the plan essentially useless—and definitely not unlimited. Faced with separate lawsuits last year by the FCC and the FTC, in September 2015 AT&T more than quadrupled the throttling threshold to 22GB, and it now remains in effect only “if in an area where the network is experiencing congestion.” Prior to then, the authorities and many customers viewed throttling as an underhanded way to hustle people off of the unlimited data plans and onto tiered data plans—where speeds are never slowed down, regardless of how much data one uses (and pays for). Those FCC and FTC suits also alleged that when customers switched away from unlimited data plans, they’d get hit with an early termination fee, which AT&T also eventually stopped doing.
Piecyk says that the overall strategy of moving customers onto metered data plans is “absolutely a business plan of AT&T.” But from a customer perspective, treating its longtime, most locked-in consumers like this, prying away the only plan that keeps them loyal to AT&T, seems counterintuitive.
Turns out, it’s strictly business. Cold, calculated business.
“[From AT&T’s perspective], it’s a calculated risk of the number of customers who are going to be upset by that, versus the impact of letting people stay on unlimited data—or letting more people on an unlimited-data plan—and it degraded my network,” Piecyk says. “I’m going to lose even more customers because everyone’s performance is going to decrease.”
But the mobile giant is presumably listening to its customers, because every time someone complains to the FCC about their phone company, cable company, or radio or TV station, that complaint gets sent to the company in question. And in August 2016, AT&T rolled out its Mobile Share Advantage plans, which eliminate overage charges for customers. Instead, “data speeds are slowed down for the rest of the bill cycle,” according to an AT&T spokesperson.
Is it a very small start? Maybe. But it’ll take likely take a lot more for people to think happy thoughts about their cell phone provider. On December 8, 2016, the FTC announced that AT&T will pay out more than $88 million to more than 2.5 million customers who were charged without their consent for “premium text message services” on their bill, a practice known in the industry as “cramming.”
For perspective, AT&T made $146 billion in revenue in 2015. And so government agencies can fine and litigate the company all they want, but it seems that no matter how many lawsuits it faces and millions of dollars in settlements it agrees to pay out, AT&T appears to have a hard time resisting the urge to sign its customers up for things they didn’t ask for.
from Hundreds of Customers Complained to the FCC That AT&T Switched Their Data Plans