Whistleblower » Blog Archive » Woman fights back against cell phone upgrade fee

Woman fights back against cell phone upgrade fee

Posted on January 13th, 2009 – 10:52 AM
By James Shiffer

I have a cousin named George Levine who lives in Queens, N.Y. He’s retired now, but for much of his life he was a professional antagonist of the telephone company. He would scrutinize people’s phone bills to find ways that AT&T, in its monopoly days, was gouging them with arcane and unjustified fees. His efforts earned him the nickname, “The Phone Ranger,” and he even composed a folk song about his struggles against the tyranny of Ma Bell. That’s why I was intrigued with an email from Janice Halvorsen, a financial consultant who lives in Eden Prairie, about how she beat an $18 charge on her phone bill.

Here’s the story, in her own words:

I’ve had a cell phone with a calling plan through AT&T for a number of years. Recently, I visited a local AT&T store to purchase a new phone. I selected a new phone and had great service getting the new phone setup. I also agreed to commit to a new 2 yr agreement for my calling plan, and the price of my new phone was adjusted accordingly. I paid for the new phone and thought everything was set.

Imagine my surprise when I received my next bill from AT&T, which included an $18 “One Time Charge for Upgrade Fee”. Now, to be clear, I didn’t change my calling plan. I just committed to 2 years on the same plan I’ve had for a number of years. All I did was buy a new cellphone. So, why the $18 charge?

I called AT&T and was told this was a standard charge. I say this was just another way to make more money off me. This fee was never disclosed to me when I bought my new phone (which AT&T says should have been). AT&T finally agreed to credit my account for the $18 (a “one-time credit” they were giving me, which they made sound like was a big favor to me). I’ve received the credit, but am irritated by the fact that I was charged this fee to begin with. How many customers never even notice this fee and just pay it?

So, beware when buying a new cellphone. What you pay for the phone itself may not be all the charges the cellphone company will try to get out of you!

Others have looked into these upgrade fees - which a number of companies assess - and they’ve become enough of a problem that one company, T-Mobile, announced last month it was dropping them. When I tried to contact someone at AT&T, I noted that the phone company does not list any phone numbers for its media contacts. Interesting. I did, however, get a prompt response to my email to the company, from Amy Grundman of the P.R. firm Fleishman-Hillard.

“I looked into this and found out that customers who upgrade to a new phone are charged an $18 upgrade fee,” Grundman emailed me. I wrote back to her, asking what exactly the fee paid for.

“The fee is a standard administrative cost related to upgrading or moving a customer’s account to a new wireless device,” Grundman wrote.

Obviously, zillions of those $18 “standard administrative costs” add up to real money. To restate Halvorsen’s question, has anyone else raised a fuss about this fee?

This entry was posted on Tuesday, January 13th, 2009 at 10:52 am and is filed under Buyer beware. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

70 Responses to “Woman fights back against cell phone upgrade fee”

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Big Jimmy Says:
January 13th, 2009 at 11:27 am
I have never noticed this in my 5+ years with Verizon, even though I have upgraded my phone three times (the most recent this past November). Granted, I used their “New Every Two” program (I get a $50 credit toward a new phone for renewing for 2 years), and they may charge if you upgrade in the middle of a plan. But I got a new phone completely free off their web site (due to an online discount, the 2-year plan price, and the $50 credit), bought a car charger for $25, and had free shipping. With tax, I paid under $30 for the entire transaction with no “upgrade fees.” It’s a shame other companies charge a fee for doing absolutely nothing.
James Puttin Says:
January 13th, 2009 at 11:29 am
Yes! I just purchased two new Sprint phones over the holiday and was told the fee would be waived only to find out on my bill that the fee was not waived. I was told they needed to code it on the purchase screen. So after three phone calls and a couple of calls back I still have not received credit for the fees. I was just like the individual above. Long time customer just getting new phones after 2+ years and signed up for a 2-year plan agreement.
Max Says:
January 13th, 2009 at 11:30 am
What a joke. The cell phone companies have been getting away with highway robbery for years. From the mandatory 2 year contracts to the BS Early Termination Charges they have mastered the nickel and diming of customers. People hate Cell Phone Companies and their “Salespeople” just like the Cable and Satellite TV companies.
Jessica Says:
January 13th, 2009 at 11:41 am
I had this same fee added when I bought a new phone with
AT&T. I called right away and complained and they
removed the fee. You have to fight these companies
and not give up. Why should we have to keep paying more
and more for the same thing? I am tired of being screwed
as a consumer.
Lauri Bourgeois Says:
January 13th, 2009 at 11:41 am
I also purchased our first cell phone on the internet.
Thru at&t. We had a huge selection of free phones to
choose from and found it cheaper for the insurance plan.
I did however purchase it thru my own business website.
Any body can order on it.
wtfsouhan Says:
January 13th, 2009 at 11:47 am
Just went through the same thing with AT&T. Have been a loyal customer for 2+ years. Not even so much as a late payment. Then I get rewarded with an additional $18 charge for agreeing to pay the company more money for another 2 years. I was told this fee was to cover any administrative costs. I said there should be no administrative costs considering everything was activated and working on the new phone within 2 minutes of purchase. I still haven’t seen any credit to my account.
aneemoose Says:
January 13th, 2009 at 11:47 am
AT&T will never get another dime from me. We were vacationing at our lake home in Northern Minesota years ago when I noticed that my phone suddenly said “no service”. It just happened to be the 15th of the month, but I assumed they were having some issue with a cell site. Several days later, I began asking questions and it turned out they had terminated their agreement with whomever had been providing their service. (I had used the phone there for several years.) When it came time to pay my monthly bill, since I had been unable to use either my or my wife’s phone for half of that month, I told them I could not in good conscience pay the full bill amount.
From that point, it got really interesting with their agents repeatedly and insultingly tellling me that I needed to read my contract where it states that they don’t have to provide service in order for you to have to pay. They were dead serious about this and I learned it was not a laughing matter as they continued to bill me for several years after this “incident”. I told them I wanted to be sued in conciliation court so that I could watch the look on the judge’s face when they made this contention.
I quickly changed to Verizon, have had terrific service for several years since and have never nor will I ever consider have anything to do with AT&T. Do yourself a favor.
Brian Mahon Says:
January 13th, 2009 at 11:52 am
I can confirm T-Mobile apparently doesn’t assess an upgrade fee.
About 4 months ago I was in the mall and was solicited
with a new phone. All I had to do is commit to two more
years, which seemed like a fair trade off.
My salesman did make me aware of an admin fee that I’d
see on my next bill. But I never saw the charge post and I’ve
been looking for it.
Steve K Says:
January 13th, 2009 at 12:04 pm
I, too, am sick to death of paying “fees.” Every time you turn around, someone has their hand out. Airlines, ATMs, phone, cable. Why can’t these companies just tell us what something is going to cost instead of tacking on hidden costs. It’s a deceptive business practice.
ehren Says:
January 13th, 2009 at 12:06 pm
I had three good years of service with Airtouch/Verizon from 1998-2000, nine months of hell with AT&T in 2001, and back to Verizon in 2002, and have been with them since. Not once has Verizon ever charged me for an upgrade, to either my phone or my plan, or changed their pricing structure without telling me well in advance, nor have I ever had to wait longer than five minutes to talk to a CSR. AT&T was a polar opposite then, and is now. Have a problem with extra fees they have docked you for, or lack of coverage in St. Paul proper? Expect to be on hold with AT&T for a minimum of an hour, or three if you’re calling during normal call center hours. Their modus operandi has always been to separate you from your money as quickly as possible while providing the least amount of service they can get away with.