AT&T notifies customers of class-action settlement via text message

Posted:
in iPhone edited January 2014
iPhone users on AT&T were sent a text message by the wireless carrier Friday, notifying them of a settlement in a class-action lawsuit regarding the charging of taxes for Internet access.



The proposed settlement and hearing are detailed on a new website set up by AT&T, entitled AT&T Mobility Settlement. It states that U.S. customers who had an iPhone data plan, or a number of other plans, between Nov. 1, 2005 and Sept. 7, 2010, might be eligible to receive benefits from the class-action settlement.



"The settlement resolves lawsuits concerning AT&T Mobility charging Internet Taxes for Internet access through certain services," the site reads. It notes that the two parties disagree about whether the charging of taxes was improper, but they have agreed to resolve the cases with a settlement.



In addition to iPhone data plans, the settlement relates to data connect plans, smartphone data features and standalone data plans, personal BlackBerry plans, and enterprise smartphone plans.



Customers have four options: they can exclude themselves and receive no settlement, write to the court about why they don't like the settlement, ask to speak in court about the fairness of the settlement, or do nothing and receive the settlement benefits.



There are also three benefits in the settlement. First, AT&T will stop collecting the taxes it has been collecting and paying to states, counties and cities. Those taxes will not be collected again unless the laws are changed to permit AT&T to charge customers.



AT&T will also prepare and process tax refund claims with state, county or municipal taxing agencies, seeking a refund of the Internet taxes it collected over the span covered by the settlement. Refund claims will be issued to customers based on the amount of taxes an account holder paid to AT&T. The settlement must be approved at a court hearing on March 10, 2011.



Finally, AT&T's settlement will also pay "vendor's compensation," which is described as the amount of money AT&T Mobility was allowed to retain from the sales tax it collected as compensation for collecting the taxes.



Details on the mobility settlement website indicate that the settlement payout "may take some time," and asks customers to "please be patient." The benefit will be sent in the form of a check in the mail.



For more information, customers can contact the AT&T Mobility Internet Tax Class Action Settlement hotline, at 1-877-905-8928.
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Comments

  • Reply 1 of 35
    So how much we talking here? A few bucks?
  • Reply 2 of 35
    I've had 3 iphones in my household since the day they were launched. All on AT&T.

    We all did not get this text.
  • Reply 3 of 35
    I received this message but am unclear about why there was a suit. So AT&T collected and paid taxes to states, and got sued by consumers? What?
  • Reply 4 of 35
    Hrm... A quick and dirty estimate of my iPhone plan at 8% sales tax in NC over the last four years tells me I'm eligible for as much as $350 from AT&T. I'll be happy to take that, especially during the holiday season. Thanks.



    That amount assumes that the class-action settlement return is based on the tax from my entire bill, not just the $30 data plan. On just the data plan, 8% tax over four years is worth $115. I'll happily take that, too. :P
  • Reply 5 of 35
    2 iphones in our house and we didn't get a text on either one of them....



    How about this? Lower my bill for two iPhones to $125/month, keep it there as long as I have two active iPhones on the account forever, and I'll decline the settlement.



    I pay $175/month right now and I think it is highway robbery.
  • Reply 6 of 35
    Regardless of who wins in this class action lawsuit, the lawyers will make millions and AT&T users who believe they were wronged will receive less than $10.00 each.



    Even if AT&T was wrong, even if they were wrong willfully, I hate supporting the band of legal scavengers who claim to do so much for the people but actually do no more than enrich themselves.



    Like so many other things in our legal system, the attorneys and newsies get the populace all riled up by telling them how evil the corporation is, but do not bother to tell the people who join in the lawsuit where most of the money goes.
  • Reply 7 of 35
    Quote:
    Originally Posted by KindredMac View Post


    2 iphones in our house and we didn't get a text on either one of them....



    How about this? Lower my bill for two iPhones to $125/month, keep it there as long as I have two active iPhones on the account forever, and I'll decline the settlement.



    I pay $175/month right now and I think it is highway robbery.



    If you think you are paying too much, why not do something sensible, SWITCH to another carrier when your contract expires. When you vote with your money, instead of your mouth, you have power.



    Much better than righteous indignation, don't you think?
  • Reply 8 of 35
    From ATT FAQ's: Top\t 15. What happens if I do nothing at all?



    "If you do nothing, you'll get any and all benefits due you under the Settlement. There are no claim forms to file and no action you must take to receive your benefits if the Settlement is finally approved by the Court. But, unless you exclude yourself, you won't be able to start a lawsuit, continue a lawsuit, or be part of any other lawsuit against AT&T Mobility about the legal issues in this case, ever again."



    Best
  • Reply 9 of 35
    Quote:

    iPhone users on AT&T were sent a text message by the wireless carrier Friday



    Wrong, I got my text message on Monday.
  • Reply 10 of 35
    What the heck is "vendor's compensation"? At least as far regular sales tax goes, I'm not aware that the seller is entitled to keep anything extra from the amount charged to customers for sales tax. The seller collects the tax and passes it to the state and gets zilch for doing so, afaik.
  • Reply 11 of 35
    cubertcubert Posts: 728member
    Scum lawyers.
  • Reply 12 of 35
    Class-action suits are a money grab by corporate ambulance chasers. Unless pro bono, they have nothing to do with helping consumers. At least once a year, I get some postcard regarding some class-action suit against some company I did business with at some point. Great, another law firm makes some bank. Yay.
  • Reply 13 of 35
    wigginwiggin Posts: 2,265member
    Quote:
    Originally Posted by schmidm77 View Post


    I received this message but am unclear about why there was a suit. So AT&T collected and paid taxes to states, and got sued by consumers? What?



    It's really quite simple, and I'm glad ATT finally got nailed for it because they've been doing it on more than data plans since long before the iPhone came out. Basically, ATT's billing system treats things as taxable, even when they are not. ATT doesn't keep the money, they do pay it to the state. So you are paying more money to your state in taxes than you should be because of ATT.



    They tried to do this to me on an early termination fee several years ago. I explained to them that the contract termination fee was subject to neither sales or use tax as the fee provided neither tangible goods or a usable service to me (quite the opposite, I was terminating my service because they failed to deliver usable service!). The customer service manager actually tried the "I don't know why you are upset, we don't keep the money it goes to your state" excuse! The fact that they were still taking money away from me didn't register with her. After I got a statement from my state's dept of revenue and showed it to her they finally removed the tax from my bill, but I'm sure they never updated their billing system and probably continue to collect illegal taxes to this day on early termination fees.
  • Reply 14 of 35
    tbelltbell Posts: 3,146member
    The issue is whether charging the tax was proper. Apparently, AT&T thought it arguably wasn't proper or it wouldn't go through all the trouble of settling.



    Quote:
    Originally Posted by schmidm77 View Post


    I received this message but am unclear about why there was a suit. So AT&T collected and paid taxes to states, and got sued by consumers? What?



  • Reply 15 of 35
    And here I thought AT&T was actually being smart about things and didn't send me a text message because I am currently out of the country. Looks like that's not necessarily the case.
  • Reply 16 of 35
    Quote:
    Originally Posted by Magic_Al View Post


    What the heck is "vendor's compensation"? At least as far regular sales tax goes, I'm not aware that the seller is entitled to keep anything extra from the amount charged to customers for sales tax. The seller collects the tax and passes it to the state and gets zilch for doing so, afaik.



    I used to manage a convenience store in New York, and how it worked there was this: every quarter when we filed our sales tax and remitted payment to the state, if we filed on time we were permitted to deduct a few hundred dollars off the amount we paid to the state for compensation for the expenses we incurred in the course of collecting the sales tax (e.g. credit card processing fees, payroll time to count and deposit money, bookkeeping expenses, etc.). It was a flat fee, I don't remember exactly how much it was, but it was also incentive for filing the returns on time. I suspect most states do something similar, and this is probably what they're referring to.
  • Reply 17 of 35
    Quote:
    Originally Posted by Sky King View Post


    If you think you are paying too much, why not do something sensible, SWITCH to another carrier when your contract expires. When you vote with your money, instead of your mouth, you have power.



    Much better than righteous indignation, don't you think?



    I'll let you know how that goes when the iPhone is finally allowed on other carriers in the US.



    I guess I could dump AT&T and go on Rogers in Ontario... All of the "international" calls would make AT&T look cheap.....

  • Reply 18 of 35
    thomprthompr Posts: 1,513member
    Quote:
    Originally Posted by TBell View Post


    The issue is whether charging the tax was proper. Apparently, AT&T thought it arguably wasn't proper or it wouldn't go through all the trouble of settling.



    All the trouble of settling?!?!? I thought companies settled in order to avoid all of the trouble of litigation.



    Thompson
  • Reply 19 of 35
    thomprthompr Posts: 1,513member
    Quote:
    Originally Posted by KindredMac View Post


    I'll let you know how that goes when the iPhone is finally allowed on other carriers in the US.



    I guess I could dump AT&T and go on Rogers in Ontario... All of the "international" calls would make AT&T look cheap.....





    Well, he still kinda has a point. Your other alternative was to NOT get an iPhone to begin with. You had the choice of either (1) getting this service and paying this amount, or (2) deciding that the service wasn't worth it and declining. You apparently determined that it was worth signing up for, but your complaints now indicate that the price is right on the boundary. In other words, AT&T pretty much nailed the limit of what you would pay for the service. From a business perspective, that's impressive. (Sorry to be so cold about it.)



    Thompson
  • Reply 20 of 35
    Interesting point, paying back "what at&t was able to keep out of those taxes", so they collected a certain amount of 'tax' and then they kept some of those taxes for themselves? Am I missing something here? This also means just because you paid 7% in taxes you might only get some minimal amount like .01% back not the full 7% it seems, which raises another question, what responsibility is the government held to to refund those taxes it collected from AT&T, since it seems the lion's share went there and not to AT&T.



    just thoughts at work so they might be all over the place.
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