Earlier this month, AT&T quietly introduced a new "Mobility Administrative Fee" which levies a $0.61 monthly charge to all postpaid contracts. While it's a seemingly small amount on an individual basis adding up to $7.32 per year, with its huge customer base, AT&T stands to make around half a billion from the tight-lipped move.
AT&T has stated that the fee will "help cover certain expenses, such as interconnection and cell site rents and maintenance" that's consistent with other phone carriers' plans, but does little to console consumers who are angered by the charge.
If you happen to be one of those pissed off costumers, there's a bright side—this fee offers a rare chance to fight back against a corporate giant. You can use the administrative fee as a loophole to break your contract, without having to pay any costly early termination fees.
Even if the monthly fee isn't a big deal to you, upgrading your phone early probably is. By canceling your contract, you can get a new Samsung Galaxy S4 or HTC One with AT&T or another wireless carrier at the cheaper subsidized pricing.
Here's how to take advantage of it.
According to AT&T's legal terms (Section 1.3), the company can change rates, fees, and terms and conditions at any time. However, any increase in the cost of your service, aside from government fees, allows you to escape an ETF when terminating your contract. Even 61 cents.
Sound too good to be true? Slickdeals forum member Quevos called AT&T (citing Section 1.3) and was able to terminate two contracts due to the charge. A few tips he gives to anyone trying to get out of their contracts:
- Don't waste your time trying to resolve it via online chat support—they don't have the authority to waive ETFs.
- Ask to be transferred to the retentions department to cancel your account.
- Point out that the fee is not government mandated or regulatory, meaning that AT&T is raising your service costs per the terms laid out in their legal agreement.
- Don't back down—they're going to try and tell you no, and you'll more than likely have to speak with at least one manager.
- If you're looking to stay with AT&T after opting out of the contract, your chances are slim, though you could technically get away with it.
When he called, he was sent over to retentions, who, as expected, tried to spin the new fee as regulatory. No matter what they say, the fee is NOT a government mandated charge, and it indisputably changes your service costs. Unfortunately, it's ultimately up to the manager you speak with, so your success will largely be determined by who you get when you call.
If you're unsuccessful with customer service, you can resort to arbitration, meaning you'll submit your case to an impartial party and let them decide who should win. Arbitration is similar to a court proceeding, but not quite as formal.
If you can stick it out through the arbitration process, you'll probably win. You just have to make sure you stick to the argument that the fee impacts your ability to pay your bill and the contract explicitly states that any increase is grounds for termination.
Once they receive your written pre-arbitration brief (here's an example of one), they'll probably settle with you to avoid wasting time and paying the $125 that it would cost them to carry through with arbitration. You could even get a little cash out of it as well.
Since the publishing of this article, many users have called AT&T to cancel their contract with varying results. Managers have become more strict, citing Section 1.3 as a reference. They claim that the new charge is an administrative fee, which doesn't allow you to cancel without getting an ETF. The fee could be waived, but only for added fees that you're already subscribed to. According to AT&T, this fee is not part of your subscription.
The wording in Section 1.3 is both ambiguous and poorly written—most definitely on purpose.
Only a few people that I've talked to have been able to cancel their contracts, but AT&T has given most others credits and discounts to placate them, since they don't want anybody to leave their service.
The key is to put your foot down and not let them bully you. If you're concise with your words and have enough to backup your claims, you will be awarded.
Let us know how your contract-canceling went in the comments below, and give us some more tips based on your experience, if any.