Markey, Franken and Senate Colleagues Press AT&T on Its Pervasive Use of Forced Arbitration Clauses in Consumer Contracts

Senator Markey joined Senator Al Franken and his colleagues pressed AT&T CEO Randall Stephenson for answers regarding the company's widespread use of pre-dispute, forced arbitration clauses in customer contracts that affect millions of consumers in Minnesota and across the country.

The letter-which was joined by Sens. Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Patrick Leahy (D-Vt.), comes on the heels of a recent CBS News investigation, which revealed that over the past two years, over 4200 AT&T customers have made complaints against AT&T alleging that the company is not honoring its deals and promotions, resulting in subscribers being overcharged for services. The report also found that over the past two years, only 18 out of AT&T's nearly 150 million subscribers sought accountability through individual, forced arbitration proceedings.

"We are particularly concerned about AT&T's treatment of customer complaints alleging that the company charged a higher rate for services than initially offered in a deal or promotion," the Senators wrote. "As consumers face rising prices for telecommunications services, they deserve accuracy and transparency about the litany of fees and charges associated with such services and a meaningful opportunity to seek accountability when they've been deceived by a provider."

The Senators went on to write, "Based on the very limited number of customers who utilized AT&T's forced arbitration system as reported by CBS, as compared to the number of AT&T customers in the U.S., we believe there exists the potential for many consumers' claims going unheard because of AT&T's insistence on forced arbitration as the only way for customers to resolve disputes with the company."

You can read the full letter below or by clicking here.

June 7, 2017

Mr. Randall L. Stephenson, CEO

AT&T Inc.

208 South Akard Street

Dallas, TX 75202

 

Dear Mr. Stephenson:

 

We are writing to request information on deals and promotions that AT&T offers to its customers, as well as the company's use of pre-dispute, mandatory ("forced") arbitration clauses in customer contracts. We are particularly concerned about AT&T's treatment of customer complaints alleging that the company charged a higher rate for services than initially offered in a deal or promotion. As consumers face rising prices for telecommunications services, they deserve accuracy and transparency about the litany of fees and charges associated with such services and a meaningful opportunity to seek accountability when they've been deceived by a provider.

 

A recent CBS News investigation revealed that over the past two years, over 4,200 AT&T customers have made complaints against AT&T and AT&T-owned DirecTV alleging that the company is not honoring its deals and promotions, resulting in subscribers being overcharged for services. The report also highlighted concerns with AT&T's process for handling customer complaints, citing customers who had received inconsistent information from customer service representatives regarding the terms of a particular deal or for the overcharges in monthly bills. Additionally, the report found that over the past two years, only 18 out of AT&T's nearly 150 million subscribers sought accountability for these - or other - issues through individual, forced arbitration proceedings.

 

Forced arbitration provisions in telecommunications contracts erode Americans' ability to seek justice in the courts by forcing them into a privatized system that is inherently biased in favor of providers and which offers virtually no way to challenge a biased outcome. Forced arbitration requires consumers to sign away their constitutional right to hold providers accountable in court just to access modern-day essentials like mobile phone, internet, and pay-TV services. Also, forced arbitration provisions frequently include a class action waiver; language which strips consumers of the right to band together with other consumers to challenge a provider's widespread wrongdoing.

 

As reported by the New York Times, most consumers lack the means or will to fight a powerful corporation alone in arbitration. This is particularly troubling in the telecommunications context when consumers can be overcharged for relatively small amounts of money, but when multiplied over a large base of affected customers, can amount to millions of dollars.

 

Based on the very limited number of customers who utilized AT&T's forced arbitration system as reported by CBS, as compared to the number of AT&T customers in the U.S., we believe there exists the potential for many consumers' claims going unheard because of AT&T's insistence on forced arbitration as the only way for customers to resolve disputes with the company. 

 

In light of these concerns, we respectfully request that you respond to the following questions by June 30, 2017:

 

1.                         Does AT&T have a policy in place that prevents customers from filing class action lawsuits against the company, favoring individual arbitration instead?

Please provide a copy of the arbitration clauses included in each of AT&T's customer contracts.

 

2.                         Over the past two years, how many complaints has AT&T received alleging overcharges based on breaches of deals, offers, or promotions? And over the past two years, how many of those customer complaints have been resolved through a mandatory arbitration process?

 

3.                         Of those complaints that were submitted to forced arbitration, what percentage were heard by the same arbitration provider?

 

4.                         Of those complaints that were submitted to forced arbitration, what was the average dollar amount of consumer claims?

 

5.                         What efforts is AT&T taking in response to the CBS News investigation to ensure that it is fully honoring its promotions and that customers receive consistent information from customer service representatives?

 

As always, thank you for your prompt attention to this important matter.

 

Sincerely,

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