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AT&T is about to get away with its bogus $1.99 ‘administrative fee’

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Both sides are asking the judge to approve a wrist-slap settlement

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Since 2013, AT&T has quietly bilked customers out of hundreds of millions of dollars with a bogus “administrative fee,” a fee it more than doubled to $1.99 a month in 2018. For a few years there, a California class-action lawsuit made it seem like AT&T might finally get taken to task. But this week, both sides told a judge they’d settle for just $14 million — meaning customers may get less than 10 percent of what they paid AT&T, while AT&T gets to keep on charging them.

According to the proposed settlement agreement in Vianu v. AT&T Mobility — which still needs to be approved by a judge — just about every AT&T Wireless postpaid customer in California since 2015 will be eligible for an estimated payment of between $15 and $29.

But again, that’s only a fraction of what AT&T’s own records show it charged: $180 per customer on average since 2015, according to documents. The settlement “represents a refund of approximately 6-11 months of the average fees,” they read. Meanwhile, the lawyers are likely to get $3.5 million.

“The estimated payment amount represents a strong result for the Settlement Class, particularly given the substantial risks, costs, and delay of continued litigation,” reads the proposed settlement agreement, going on to list all the ways that the lawyers suing AT&T believe that AT&T might still win the case.

There’s little question the fees are bogus, in case you’re wondering: Judge Laurel Beeler previously stopped AT&T from trying to dismiss the case because the company “deceptively and unfairly disclosed [the administrative fee] as a pass-through cost.” Which is to say, AT&T can’t pretend it’s an unexpected expense that it’s simply passing along to its customers — the carrier is profiting from this! And yet, the plaintiffs’ legal team isn’t going to pursue a win.

Oh, and you won’t even get a check in the mail if you’re still an AT&T customer, assuming this version of the settlement is approved. The money will be credited back to your AT&T account, where AT&T can dip its hand right back in again for that $1.99 — or more if it feels emboldened enough to increase the fee yet again. (Admittedly, the AT&T account could be a more reliable way to make sure customers get money back.)

Should it be approved, you’ll likely find the settlement website here.

Here are a few more links you may find relevant:

Update, 6:19PM ET: “We deny the allegations in this lawsuit because we clearly disclose all fees that are charged to our customers. However, we have decided to settle this case to avoid lengthy, expensive litigation,” reads a statement via AT&T spokesperson Seth Bloom.