Hit with an early termination fee from AT&T — and then some

Santosh Reddy gets hit with an extra charge after terminating his AT&T account. Can they do that?

Question: AT&T has been so expensive these days compared to other carriers, it has forced me to switch to a different carrier. I made the switch on April 16th. My billing cycle used to be from the ninth of every month to the eighth of the following month.

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AT&T bills in advance. As usual, I paid my bill for the month of April in advance, on April 9.
Then, I received another bill. AT&T charged me an Early Termination Fee, which makes sense, but I didn’t get any credit for the unused portion of my previous billing cycle. I paid until May 8th, 2015, but used the service only until April 16th.

I believe I am entitled to a refund of the unused portion. My bill for that period is $179, and by my calculations, I’m owed $120.

I called AT&T customer care, and was told I wouldn’t receive any refund. And I was treated rudely. I was informed that it’s AT&T policy not to refund any credit when the contract is terminated early. I feel cheated. I need your help in disputing this with them. — Santosh Reddy, Herndon, Va.

Answer: It looks as if AT&T goofed. If you review the company’s Terms of Service, a document on which you based your argument, it appears the math may be in your favor.

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Specifically, “After the first 14 days, you may terminate your Agreement for any reason. However, you agree to pay AT&T for all fees, charges, and other amounts incurred and owed under your Agreement along with the applicable ETF. The Early Termination Fee is either: (a) $325 or (b) $150. The ETF reduces each full month of your Service Commitment that you complete.”

But looks can be deceiving. AT&T has its own way of figuring out what you owe, and you can bet it will be in its favor every time. When you encountered this corporate intransigence, you could have appealed to someone higher up the food chain. I list the AT&T contacts on my website. I’m not sure if it would have done you any good in this case, unfortunately.

I contacted AT&T on your behalf. It replied directly to you, saying your numbers were off. Its records show your account was canceled April 16. The new billing cycle started on April, and ended on May 8.

AT&T charges for services in advance, meaning you’re billed one month ahead for service. Section 5.1 of your service agreement explains that the final month’s charges are not prorated if services are cancelled immediately. Since you signed the agreement, you are on the hook for those charges. I’m sorry.

This story was first published on May 4, 2015.