Emboldened by the AT&T Mobility LLC v. Concepcion ruling, AT&T employed its new found immunity from class-action lawsuits to put consumers’ wallets in a tight spot. The 2011 Supreme Court case ruling allowed class action suits to be dismissed on the grounds that contracts of service stipulated use of individual arbitration. This disqualified consumers from collective legal remedies like class-action suits. Given the costs of legal fees, consumers seldom saw the courts as a viable option to fight fraud.
The most recent development in corporate legal cornering is the so called “locked-in price” offers touted by AT&T and competitors like DirecTV as a fix for skyrocketing rates. Receiving bills doubling expected rates, consumers are the ones feeling locked-up by rates that were anything but locked-in. Threatening termination of service, companies are often unfazed; outrageous early termination fees only serve to bolster their bottom line. Knowing the price gouging is not substantial enough for each individual to seek claims in court, the only remaining blindside AT&T must cover is class-action suits.
Enter the arbitration clause.
Now legally protected from all angles, this becomes a game AT&T cannot lose once the terms of service are signed. The losers, unsurprisingly, are consumers and their wallets. Despite over 4,000 complaints against AT&T and DirecTV within the past two years for overcharging, the practice remains common. Given that overcharging represents billions of dollars in revenue for exactly zero additional services offered, there is little doubt corporations will continue until legal penalties prevent it.
