Trade in mobile phone not received by ATT

I received my upgraded IPhone 11 Pro Max on Oct 14, 2019 and returned the IPhone XS Max in a AT&T given box with signed customer agreement inside and pre-printed label on the outside on October 22, 2019. USPS tracking shows that it was picked by the shipping agent at 9.49 AM on October 23, 2019 in Millersville, PA 17551. On November 1, 2019 I received an email from ATT saying they have not received the returned phone and that I will be charged $504.16 if I don't return it on that day. I had the prepaid mail receipt from USPS and the latest tracking still showed that the package was picked by the shipping agent. With this info, I immediately called customer care, and they told me to wait for 2 weeks and check back.

On November 24, 2019 I again received an email from ATT saying that I have already been charged $504.16 and it will reflect in my next billing cycle. I made a call to customer care and they bluntly said they cannot remove these charges unless they have received the returned item.

This is just ridiculous. I have been a loyal ATT customer for 10 years and I strongly feel that ATT is scamming customers with this return service protocol.  I don't want to pay for the phone I no longer have in my possession. This experience has been so bad that I may switch to a better and reliable service provider. I hope ATT rectifies this issue at the earliest and not charge me unnecessarily.