A Cincinnati-area man found a DirecTV promotion from his local phone company promising a full package of television programming with a DVR box for just $30 a month.  A month later, that “bargain” literally emptied his checking account of more than $400.

Cincinnati Bell, like several other telephone companies, tries to compete for “triple play” customers accustomed to one bill for phone, Internet, and television service.  But where the company’s fiber network does not extend, customers can only get telco-TV by signing up for a DirecTV satellite television package.

Gary Gideon of Westwood learned the hard way that phone company promotions promising attractive prices are often tempered with paragraphs of fine print which make savings elusive.  In this case, the trouble began when Gideon thought he was receiving the standard DirecTV DVR that was included in the promotion.  Instead, the company supplied him with an HD DVR that carries a hefty additional charge, turning his $29.99 price he was originally promised into $49.85 instead — nearly $20 extra a month.

When Gideon complained about the surprise charges, he was offered a DVR downgrade, if he was willing to pony up an expensive deposit he was never asked to pay for the more deluxe model.  The installer responsible for Gideon’s setup promised he could walk away and cancel the package without any harm done.  But a month later, DirecTV deducted nearly $400 from his checking account to cover “early termination fees.”

Despite the assurances Gideon received, the satellite company’s customer service agents refused to budge on waiving the termination fee for just a few weeks of service, telling Gideon “nobody” has the power to waive such fees.

[flv width=”360″ height=”290″]http://www.phillipdampier.com/video/WKRC Cincinnati Unexpected Satellite Cable Fees 6-2-11.mp4[/flv]

Nobody except the media or an empowered customer service representative.  WKRC-TV in Cincinnati covered Gideon’s nightmare and found DirecTV only too willing to reverse the early termination fees they refused to refund earlier.  They said it was “good customer relations” to do so.  It’s also good public relations on the six o’clock news.

When dealing with satellite providers delivering service on behalf of a phone company, always carefully review the fine print for equipment and installation fees, contract terms and obligations, and disclosures for any additional charges.  If the equipment does not match what the offer provided, refuse it.  Remember that the truck plastered with DirecTV logos that appears in your driveway to handle the installation is probably an independent contractor — one that usually cannot make promises on behalf of the satellite company.  (2 minutes)

Soldiers starting basic training or preparing to deploy overseas have a lot on their minds.  Worrying about their AT&T cell phone service isn’t supposed to be one of them.

Stop the Cap! has been hearing from soldiers in several states who are sharing similar stories about AT&T insisting on hefty early termination fees when calling to suspend or cancel service because of military training or deployment abroad.  Cell phones are prohibited during basic training, which lasts 10 weeks.  So why pay for a service you cannot use for two and a half months?

The Chicago Tribune shared the story of Nathaniel Jungheim, of Chicago, who faced an intransigent AT&T when he called to put his account on hold during basic training.

“They informed me that they have recently changed how they handle military accounts and said I would have to pay $10 a month plus taxes to keep my account in suspension,” he said.

Jungheim said he complained and was told he would either have to pay the monthly fee or $275 to terminate his contract.

“I asked to speak to a supervisor but was told they would say the same thing,” Jungheim said.

Those “changes” are likely illegal under the Service Member Civil Relief Act, a federal law which protects America’s soldiers from predatory practices from bankers, property management companies, insurance companies, and yes, cell phone companies.

Text of S. 3023 [110th]: Veterans’ Benefits Improvement Act of 2008
Oct 10, 2008: Became Public Law No: 110-389

SEC. 805. TERMINATION OR SUSPENSION OF CONTRACTS FOR CELLULAR TELEPHONE SERVICE FOR CERTAIN SERVICEMEMBERS.

(a) In General- Title III of the Servicemembers Civil Relief Act (50 U.S.C. App. 531 et seq.) is amended by inserting after section 305 the following new section:

SEC. 305A. TERMINATION OR SUSPENSION OF CONTRACTS FOR CELLULAR TELEPHONE SERVICE.

(a) In General- A servicemember who receives orders to deploy outside of the continental United States for not less than 90 days or for a permanent change of duty station within the United States may request the termination or suspension of any contract for cellular telephone service entered into by the servicemember before the date of the commencement of such deployment or permanent change if the servicemember’s ability to satisfy the contract or to utilize the service will be materially affected by such deployment or permanent change. The request shall include a copy of the servicemember’s military orders.

(b) Relief- Upon receiving the request of a servicemember under subsection (a), the cellular telephone service contractor concerned shall–
(1) grant the requested relief without imposition of an early termination fee for termination of the contract or a reactivation fee for suspension of the contract; or
(2) in the case that such servicemember is deployed outside the continental United States as described in subsection (a), permit the servicemember to suspend the contract at no charge until the end of the deployment without requiring, whether as a condition of suspension or otherwise, that the contract be extended.

AT&T doesn’t feel the law applies to them, however, judging from complaints we’ve been receiving from readers.

Stop the Cap! came up on a private military forum open to service members, and ever since, we’ve heard some stunning complaints about AT&T and suspicions the phone company is hoping to rely on soldiers not fully understanding their rights.  Remarkably, all of the complaints have been about AT&T.  Verizon and Sprint reportedly treat the troops with considerably more respect.

“I was ordered to Europe last November and wanted to call and cancel my AT&T service and ran straight into a brick wall with those people,” shares Elizabeth.  “They told me they don’t suspend accounts for anyone, only cancel them, and demanded $200 in early cancel fees to be paid immediately on my credit card or they would ruin my credit.”

Nathan, who is now serving in rural Alaska, shared a similar story.  On his third call to AT&T, the representative offered him just one choice — a $10 a month suspended plan, if he agreed to extend his service contract when he got back.

“I was reading off of AT&T’s own website stating the company would cancel my service with no penalty, but the operator could have cared less,” Nathan writes.  “If I didn’t like it, he would charge me $300 to immediately cancel my contract and that was that.”

Nathan got the distinct impression the representative was accusing him of ripping off AT&T for a new phone he wanted to “walk away” with free and clear.

JJ managed to get a supervisor to “do him a favor” and cancel his contract with no penalty, but only if he faxed over his military ID, birth certificate, driver’s license, orders of deployment, and a copy of a major credit card for “verification purposes.”

“I told them to forget it — I was not about to send some low paid AT&T call center guy every form of ID I had so I could discover my identity stolen when I got back,” JJ said.

“AT&T cares less about the troops who defend their right to exist in a free United States; they only care about money and that is disgusting and unpatriotic,” JJ shares.

Another customer, deployed overseas, was told to report to an AT&T store in the United States to discontinue service — there was no other way to cancel penalty-free.

As has been so often the case, when media attention shines a bright light on potentially illegal business practices or bad service, relief is soon in sight, for at least a few people.

The Problem Solver called Brooke Vane, a spokeswoman for AT&T, and described Jungheim’s situation.

Vane emailed Thursday to say AT&T adheres to the federal Service Member Civil Relief Act, which provides guidelines for how companies deal with those who are called to duty.

Vane instructed Jungheim to call AT&T’s customer care phone number again and go through the process of suspending service.

“Once he meets the requirements, including providing us with his orders, as required by law, we can process this request,” Vane said.

Thursday evening, Jungheim called AT&T and spoke to a representative.

“I faxed over my deployment orders … so I should be a go,” he said.

He will not be charged the $10 a month.

AT&T's website for servicemembers makes it easy to buy more of their products and services, but doesn't deliver much help to those who want to put their accounts on hold or leave. (Click image to visit site.)

Stop the Cap! recommends you arrange to cancel or suspend service as soon as you have a date in hand for basic training or deployment abroad.  Then call AT&T at 1-800-331-0500 and notify them you need to fax your written request to discontinue service, penalty-free, and are including a copy of your military orders.  By declaring your intent, you will present yourself as knowledgeable about your rights, and are less likely to encounter resistance from AT&T.

Do not fax or mail copies of any forms of personal identification.  They are not required under the law and there is no reason to expose yourself to identity theft.  We recommend you consider service cancellation over service suspension, because it lets you walk away from AT&T free and clear.  You will lose your cell phone number, but when you return, you can sign up as a new customer and receive a new phone discount.

Always write down the name and extension of the person you spoke with along with the time and date of your call and keep it in a file until you are assured the request was processed properly.

If you encounter problems, insist that your call be escalated to a supervisor.  If that fails, two of our readers reported they had near instant resolution to their ongoing problems with AT&T by calling their member of Congress or two Senators.

Verizon's Herd Mentality

Saturday will be the final day Verizon Wireless customers will be able to sign up for one-year service contracts and still get a discount on new equipment.

Effective April 17, customers will have just two choices for service — the ubiquitous two year contract with a steep early termination fee or month-to-month service priced artificially high to recover equipment subsidies off-contract customers do not receive.

Verizon claims the changes will “reduce consumer confusion,” which suggests customers couldn’t make up their minds between contracts for one year or two.  But the company claims most subscribers managed soon enough, usually choosing two year contracts to maximize discounts on equipment.

Some media outlets suggest the change is to discourage customers from abandoning Verizon Wireless for AT&T by holding them to longer two year contract terms.  But with AT&T losing customers to Verizon, that is an unlikely reason.

More likely is the company’s ongoing “simplification” of service plans, which has the unfortunate side effect of herding customers into plans that may not serve them well.  Verizon earlier did away with their popular “New Every Two” handset bonus plan which rewarded loyal customers renewing their contracts with additional $50 discounts.  The company also has cut back on other discounts on equipment, driving an increasing number of customers to third party retailers like Wirefly.

The one year service plan was established to let customers get some discount on wireless equipment without tying them down to a 24 month service commitment.  Since wireless providers build in cost recovery of the subsidies they “give” customers, you effectively pay back those discounts over two years by in the form of overpriced service plans.  Month to month “off-contract” customers do not get the benefit of any discounts for new equipment, but pay the same high prices for service everyone else does.

If your contract has recently expired, or you never had one, you might do better with Page Plus or Wal-Mart’s “Straight Talk” which both rely on Verizon’s network, but sell service at much lower prices, without a contract.

AT&T’s forthcoming changes to their broadband service include more than just an Internet Overcharging scheme.

As the Los Angeles Times reporter David Lazarus discovered, AT&T now reserves the right to terminate your service if you excessively annoy the company’s employees, perhaps while calling to complain about the company’s new 150-250GB usage limits.

Lazarus reports AT&T’s contract now stipulates the company can cancel your service “if you engage in conduct that is threatening, abusive or harassing” to the company’s workers, or for “frequent use of profane or vulgar language” when dealing with service reps.  At least they won’t wallop you with an early termination fee if they pull the plug on you.

But that’s not all.  AT&T also followed Verizon’s lead telling their existing DSL customers once something better arrives from the company, they can stop selling DSL. For AT&T, this means they can switch your standalone DSL service to U-verse with or without your permission, billing you for a potentially more expensive broadband service.

While U-verse delivers a much improved broadband experience over traditional DSL, some budget-minded AT&T customers tough it out with DSL because it often carries a lower price and does not require an expensive bundle of video and phone service to win substantial discounts.  U-verse does.

AT&T spokesman John Britton told the newspaper he couldn’t imagine the company actually doing this to customers, but he acknowledged that this is what the new contract says.  More than a few AT&T customers couldn’t image the nation’s largest phone company would need to cap broadband usage of their customers because of alleged “congestion” problems either.

Verizon Wireless wins bragging rights this month as a new study shows fleeing iPhone owners on AT&T’s network were willing to put up money just to get out of their contracts and switch to Verizon. Two of every three departing customers paid AT&T up to $300 to break-up with the carrier and bought new iPhones that work on Verizon’s network.

The study, produced by Mobclix, found reception on AT&T’s network was by far the biggest issue cited by exiting customers, followed by Verizon’s offer of a personal hotspot add-on, and the perception Verizon runs a more robust network.

Mobclix found Verizon’s newest customers may have a point about who runs the stronger network.  Many AT&T customers are accustomed to relying on the company’s broadening Wi-Fi network to cope with 3G reception woes.  At least 53 percent of AT&T customers rely on Wi-Fi regularly for data connectivity.  On Verizon’s network, just 38 percent do.

But predictions of a stampede away from AT&T to Verizon have turned out not to be true, either.  Just 14 percent of America’s iPhone owners are on Verizon’s network.  AT&T serves the rest.

Analysts suspect the reason for this is that AT&T’s worst problems are in certain major metropolitan areas, but the carrier does respectably well providing service in many smaller and medium-sized cities.

Mobclix produced a map which may bear this out.  It shows the largest concentration of Verizon iPhone owners in the cities that are routinely cited as problem areas for AT&T:  San Francisco, New York, Seattle, Chicago, Boston, and Los Angeles.

“Based on our survey findings today, it’s clear that consumers are taking control of their mobile destinies by evaluating carrier criteria such as Wi-Fi usage, reception issues and reputation as part of their decision to remain with their carrier or make a switch,” said Krishna Subramanian, Mobclix co-founder.

(click to enlarge)