Contributor
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Is it legal to charge taxes and other fees on early termination fee?
I paid my last bill and cancelled service. I received a final bill with ONLY early termination fee on it, no service charge because I cancelled. ATT charged me taxes, service fees and other fees on the early terminatio fee. I had two phones and fee came to $155 per phone for $310.
As I said they added taxes and other charges to this which come to about $75 bringing total bill to$385. I'm wondering if this is even legal to collect service fees and taxes on a penalty charge. I don't pay tax on late fees or bounced checks, so why should they charge for a early termination fee?
It also is unfair. My other charges on my regular bill came to about $25 per month wile I did have serve. Now that I DON'T have service they want $75? This is outrageous and again, I don't think it is legal. I am contacting my local representative to find out how they can do this, it seems they do it to everyone.
I've offered to pay the $310 and no fees or taxes but they won't accept. I told them they can have nothing or $310 as agreed in contract and they chose nothing. What dopes.
I've been through this before. They send lots and lots of collection letters and then settle for about half in the end. It cost them a fortune to collect so little. That's some kind of stupid. And I have excellent credit and lots of it so this little thing won't bother me a bit.
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formerlyknownas
ACE - Sage
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117K Messages
8 years ago
The early termination fee is not a "penalty". It is the balance of your unused service contract because you agreed to pay for 24 months service.
Taxes and fees are collected per your state and federal law, ATT doesn't have any choice and they don't get to keep that money.
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MicCheck
ACE - Expert
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14.2K Messages
8 years ago
I'm sure the AT&T legal and accounting teams are quite informed about what taxes, fees, and other charges they must collect for the various jurisdictions where AT&T offers service.
You state "$310 as agreed in contract". The contract also states that you will pay applicable taxes and fees. You are the party trying to reneg on your contractual obligation, not AT&T.
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Phildntx1
Contributor
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1 Message
8 years ago
I had the same issue plus they included in the final bill the monthly data plan charge plus taxes and then issued credit for the monthly data plan but no credit was issued for the tax they charged for the data plan.. However the biggest frustration was calling ATT to discuss, after you finally get past the automated system (20 minutes) and get to talk to a real person they have no knowledge of how resolve the issue. The ATT service person said since I Paid my bill there is no way to refund the overbilling????? I asked to speak to her supervisor and that was a bigger waste of the time, no wonder they are losing customers. I was with ATT for 20 years and switched to Sprint; I would never consider ATT in the future or would I recommend it to anyone!
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GLIMMERMAN76
ACE - Expert
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23.9K Messages
8 years ago
There are no taxes on DATA plans atleast not here in IL. As internet cant be taxed per the fed gov.
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formerlyknownas
ACE - Sage
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117K Messages
8 years ago
@GLIMMERMAN76 is correct, data plans are not taxed. Your line fee is subject to taxes and fees.
Whether or not ATT chooses to issue a credit or do a buy one get one free on phones does not change the fact that taxes and fees are collected first and are not refunded.
The government will get theirs no matter what.
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victor2017
Contributor
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3 Messages
7 years ago
All telecommunication service providers are required to contribute to the federal USF.
FCC doesn't require telecommunication servie providers to pass on this charge to its customers, but it allows them to do so.
AT&T like many other providers passes on this charge to its customers as a % of their monthly charges.
And since they bill in advance, this charge (fee/surcharge) is also billed in advance.
Upon cancellation of service, there should not be any plan fees for the next month as these are also charged in advance. And there should also not be any USF.
However, when there is a contract termination fee in the last bill, AT&T billing systems will still calculate ta "Federal Universal SERVICE Charge" as a % of the termination fee. This does not seem right at all. You are not a customer, not receiving service, and they are still charging a "Service charge".
People should complain to FCC.
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formerlyknownas
ACE - Sage
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117K Messages
7 years ago
@victor2017
An early termination fee is a charge for services the customer agreed to use, but choose not to.
Since we do not know the content of these taxes, we cannot comment. But as written earlier, I'm sure ATT knows which fees and taxes are legitimate and bill accordingly.
Since contacts have not been offered in just over a year, this will not be a problem for much longer.
When terminating service with a Next installment, the only amount owed on the phone is the balance printed on the bill.
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victor2017
Contributor
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3 Messages
7 years ago
FCC – (888-225-5322); https://consumercomplaints.fcc.gov
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victor2017
Contributor
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3 Messages
7 years ago
@lizdance40,
I appreciate your response and this community. I am sure AT&T knows about their billing line items. However, let's not tell ourselves that their bills are always right without seeking clarifications for questionable line items.
As we all know, AT&T has been fined multiple times for billing issues. The most recent is: https://www.ftc.gov/enforcement/cases-proceedings/refunds/att-refunds
I can also share that Cingular (which got rebranded to AT&T some years after aquiring AT&T) and T-Mobile did not charge a federal universal service charge on the early termination fee when I was a subscriber with them. There are also samples of actual bills posted by people where they show the provider had charged state and other taxes on the early terminaton fee, but not universal service charge.
I will be happy to share what I hear back from FCC or AT&T as I've filed a complaint at the FCC website.
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formerlyknownas
ACE - Sage
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117K Messages
7 years ago
Agreed. You should always read your bill.
As you noted it is up to the carrier to absorb or pass on the taxes and fees. Because the vary by state, most pass them on. The new T-mobile plan is supposed to absorb them in one fee.
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