USPS Lost My Returned Device using AT&T Return Label

I dropped off a phone at USPS I needed to return to AT&T using their pre-paid return label that I was instructed to use. It's been 4 months and AT&T has not received the returned device and after tracking the returned package with USPS, it has not moved from the USPS Distribution Center. I was charged $1,913 for the device because AT&T has not received it. Then, after I was unable to pay the $1,913 for the returned device, my wireless device was suspended for non-payment because of the lost, uninsured package and I was continued to be billed for 5 months for services resulting in an additional $1,000+ charge.  AT&T is telling me that the lost device is my responsibility but I was forced to use their return label when mailing back the device. In addition, AT&T does not insure the return label which is absurd because I would have easily paid $5 to insure a $2,000 phone. They have now transferred my account to Collections and will not discuss this with me. I am beginning the Arbitration process but I honestly cannot believe this is how AT&T treats their customers.