Is Grandmom Still Renting Her Old Telephone?

March 25, 2009

Some of us remember when telephones were clunky black objects with long cords and a big rotary dial face. Our monthly Ma Bell bill contained a small charge for renting the telephone equipment.

Incredibly, some people are still paying that monthly rental charge, with lifetime payments high enough to have bought hundreds of telephones. Some no longer even have the telephones they are “renting.” Who? Mostly elderly customers who may have no idea they are still paying to rent their old telephones.

A few months ago a Staten Island woman who had lost her job and had plenty of free time decided to carefully examine her monthly bills. She discovered that the quarterly $21.55 AT&T telephone bill she been faithfully paying for years included a rental fee for a “Trimline” telephone she had thrown away years ago. She also noticed that the AT&T logo at the top of the bill had changed to “QLT Consumer Lease Services.” When she called and informed the company that she no longer had the telephone, she was told she would get a refund. A refund check arrived shortly thereafter. The amount? $2.16.

In 1982 AT&T agreed in an anti-trust settlement with the government to break up into regional telephone companies, thereby instituting competition with new companies and ending its monopoly on the production and leasing of telephones. Telephone equipment became cheap and easily available. Today, more and more people (almost 20%) are even leaving their landlines behind and relying exclusively on cell telephones.

But many people, oblivious of quickly advancing telephone technology, continued to pay their monthly telephone bills, unaware that included in the bill was a lease payment for their phone.

A class action was eventually filed against AT&T for overcharging people for rental payments that vastly exceeded the actual cost of the equipment. A settlement in 2002 set aside a $350 million fund to compensate almost 30 million class members, but only 92,000 claims were filed, with payouts ranging between $15 and $80.

Today it is hard to gauge how many people still rent their telephones. The entity that was in charge of leasing, AT&T Customer Lease Services, changed its name in October, 2008, to QLT Customer Lease Services. Who are QLT’s primary customers? That’s not hard to figure out, since QLT also offers a “Lease Reward Card” that helps save money on vision and hearing aids and prescription drugs.

Echo Media, a print media advertising service that allows advertisers to include their inserts into monthly billing services, includes QLT Customer Lease Services as one of the available monthly billers that advertisers can take advantage of. Echo Media states that this “mature audience is comprised of long-standing Consumer Lease customers,” and has a yearly circulation of 1,554,000.

QLT charges $5.95 per month, or $71.40 per year, to rent a standard telephone. You can buy a standard phone for about $20.

So check and see if Grandma is still paying to rent a telephone she could have bought hundreds of times over.