AT&T rejects cell phone customer over usage

CONSUMING INTERESTS

June 22, 2008|By DAN THANH DANG

Tamara Granger got dumped by snail-mail.

Despite a relatively drama-free, five-year relationship, the Dear John-esque letter Granger received this month gruffly informed her that things just weren't working. Avoiding blame, the letter oh-so-selflessly suggested that Granger find a new relationship that would meet her needs more fully. And not to rush, but the other half of her union wanted out by August.

"It just came out of the blue," the 38-year-old account executive from South Baltimore said. "Before the letter, there was no communication. That was the frustrating part. I was stunned."

This was no mere man kicking Granger to the curb.

It was her cell phone company.

It's not every day we hear about companies rejecting customers. But it happens. Last year, Sprint told more than 1,000 of its customers who called customer service way too often to take a hike.

In this case, Granger signed up with AT&T in January 2003. For $39.99 a month, Granger's National Coverage plan allowed her 450 anytime minutes, 5,000 night and weekend minutes, and anytime rollover minutes. Calls to other AT&T customers were free under her plan.

"My average bill is usually $50," Granger said. She stuck with AT&T all these years because most of her frequent calls are made to friends and family who also use AT&T.

"I've got a squeaky clean record with them," Granger said. "I pay my bills on time."

Granger had no idea the relationship had hit a rough patch until she got AT&T's letter.

It said a routine review of customer accounts showed that more than half of her wireless usage was in an area not directly served by the AT&T network. In other words, the location from where she was making most of her calls was not in an area where AT&T provides coverage. Since the off-network usage was contrary to the terms of her rate plan, AT&T said "to maintain wireless service, you will need to find an alternative carrier."

"Can they even do this?" Granger said. "Couldn't they have called me? I am a human being for God's sakes. I felt like they had just broken up with me and I don't understand why."

The answers to her questions are yes, and yes.

Cellular contracts are notorious for giving companies the right to terminate customer contracts for any reason they see fit. AT&T could probably use a refresher course on divorce etiquette. In such situations, AT&T says it usually gives customers 90 days notice by letter, text messages and activating a roaming indicator light on handsets, but Granger said the letter was all the warning she received.

That said, the company had a pretty good business reason for taking such extreme action.

AT&T's Terms and Conditions state, "If your usage of the Services on other carriers' wireless networks ("offnet usage") during any two consecutive months exceeds your offnet usage allowance, AT&T may at its option terminate your wireless service or access to data Services, deny your continued use of other carriers' coverage, or change your plan to one imposing usage charges for offnet usage."

So while Granger's pattern of calls to friends and family had not changed over the years, she had changed the location from where she was making those calls.

Granger had moved from Baltimore with her boyfriend to work in Montana for seven months temporarily. She moved back to Baltimore more than a month ago.

It was that move that triggered AT&T's break-up letter.

"Essentially, AT&T offers nationwide calling plans that include no roaming and no long distance charges," said Alexa Kaufman, an AT&T spokesman. "Our national calling plans are designed to give customers value and convenience. In really, really rare instances, however, we come across customers who use our services outside of our footprint. We find that they're roaming far more often than they're not roaming."

Such off-network use means the company ends up losing money on the customer, Kaufman said.

AT&T's national plan does not offer service in large swaths of Montana, according to its coverage map. In order to provide service to customers in those areas where AT&T hasn't built out its network, the company makes a deal with the local carrier to patch through AT&T customer calls. AT&T then pays a fee to the local carrier for those calls.

"That could quickly get expensive," said Roger Entner, who leads Nielsen IAG's Communications Sector covering the wireless, wire line and cable industry. "If, say AT&T pays its roaming partner 5 or 10 cents a minute, and she's using 5,000 minutes outside of AT&T's footprint, she's costing them $500 right there. Meanwhile, AT&T is only collecting $50 from her a month. They'll eat that cost for a little while, but if it's a continuing pattern, they're going to say, 'We love you, but we're not paying out $500 a month for you anymore.'"

Kaufman did not share exactly how much Granger was costing the company while she was in Montana, but explained that in some situations, "We end up paying out thousands of dollars on a customer who is paying us $40."

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