AT&T is facing a class-action complaint over its practice of charging a $1.99-per-month “Administrative Fee” that isn’t disclosed in its advertised rates.
As the complaint notes, “AT&T prominently advertises particular flat monthly rates for its post-paid wireless service plans.” But after customers sign up, the telco “covertly increases the actual price” by tacking on the “bogus so-called ‘Administrative Fee,'” according to the lawsuit filed Thursday in US District Court for the Northern District of California.
AT&T “hides” the fee in an easy-to-miss spot in customer bills, the complaint says, and it “misleadingly suggests that the Administrative Fee is akin to a tax or another standard government pass-through fee, when in fact it is simply a way for AT&T to advertise and promise lower rates than it actually charges.”
AT&T also provides an explanation “deep within” its website, but this is not an adequate disclosure, and the website description “serves to further AT&T’s deception and scheme by suggesting that the Administrative Fee is tied to certain costs associated with AT&T providing wireless telephone services (interconnect charges and cell site rental charges),” the complaint said.
If AT&T’s description of the fee is accurate, “it would merely reinforce that this undisclosed fee should be included in the advertised monthly price for the service because those are basic costs of providing wireless service itself, and thus a reasonable consumer would expect those costs to be included in the advertised price for the service,” the complaint said.
AT&T’s website acknowledges that the fee is not a tax or required by the government. But the complaint says that AT&T customer bills list the fee in the “Surcharges & Fees” section, which is otherwise used to list “government costs AT&T must pay (e.g. taxes).” This suggests to customers “that the Administrative Fee is akin to a tax or is another government-related pass-through charge, which it is not.”