Lieff Cabraser Civil Justice Blog
AT&T Allegedly Using Forced Arbitration to Overcharge Customers

Senators Accuse AT&T of Using Forced Arbitration to Overcharge Customers

Five U.S. senators claim major telecommunications company AT&T is utilizing forced arbitration clauses in order to sidestep its customers’ efforts to get justice for claims of rampant overcharging. The Dallas-based company allegedly charges consumers for AT&T services at rates significantly higher than those originally offered in a wide range of advertised promotions, then forces customers seeking redress into unfavorable mandatory arbitration.

Senators Al Franken (D-Minn.), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Patrick Leahy (D-Vt.), and Edward Markey (D-Mass.) noted that according to a CBS News investigation, there have been “more than 4,000 complaints against AT&T and [subsidiary] DirecTV related to deals, promotions and overcharging in the past two years.”

According to AT&T’s relevant Terms of Service, their “forced arbitration” provisions include a class action waiver, an agreement that strips consumers of the right to group together as a class in order to challenge a company’s widespread wrongdoing. AT&T argues that these arbitration agreements “serve their consumers better” than the provisions of an ordinary court of law.

The named federal legislators take a very different view. “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,” the Senators wrote in a letter sent to AT&T CEO Randall Stephenson. “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.”

Despite the multiple thousands of customer complaints, CBS News discovered that out of the nearly 150 million AT&T customers, only 18 in the past two years have gone through arbitration to prosecute small claims. Not 18 million — just 18. That’s a whopping .00000012% of AT&T customers who found it worthwhile to pursue arbitration as a way to effectively seek justice against AT&T.

Lieff Cabraser’s Consumer Protection Practice

False advertising, bait and switch marketing, phony disclosure of manipulative bookkeeping devices, unconscionable pricing, and charging for services never provided are some of the many unfair and deceptive practices rogue corporations use to defraud consumers.

Lieff Cabraser advises consumers as well as businesses whether and how to pursue legal action to halt and obtain compensation for the deceptive practices of large corporations. With a blend of courage, superior legal skills, and high principles, we protect our clients’ interests and help them achieve their goals by winning highly-complex consumer protection lawsuits against those that have defrauded consumers.

We have successfully prosecuted scores of consumer class action lawsuits against many of the largest U.S. banks, financial service companies, and corporations. Working with co-counsel, we have achieved judgments and settlements in excess of $3 billion for consumers in these cases, including over $200 million in lawsuits over abusive and harassing robocalls and text messages brought under the Federal Telephone Consumer Protection Act.