AT&T Fails To Provide Service, Holds $750 Deposit Hostage For Two Months

AT&T demanded a $750 deposit from Richard before selling him an iPhone, but couldn’t provide service because they improperly entered his address. Richard spent hours at the AT&T store trying to fix the mistake before deciding to cut his losses and recover the deposit. AT&T promised to refund his money in 7-10 days. That was two months ago. Why the hold-up? AT&T can’t issue the refund because they don’t have Richard’s proper address.

Richard writes:

I went and purchased me an iPhone, then went home to activate my service. I was then advised that I needed to go to one of the retail locations to pay a deposit. So I drive 15 miles to the nearest retail store to have my services activated. I was told that I had to pay a $750.00 deposit….wow did not know that deposits could be that high. Anyway I paid it because I wanted the service. I took the activation receipt back home and attempted to activate the service. The registry kept rejecting me stating the my information was wrong and the address did not match. I contacted ATT customer service and spoke with Tasha who told me that the representative at the ATT store ran my credit in the wrong market because the address was not matching the activation code that was given after the deposit was made.

I returned to the store that same day and spent 2 hours while the two representatives were trying to figure out the problem. I felt like I worked there after being there for so long. The store closed and I was still trying to get the problem resolved. After 3 days of problem solving, phone call to customer service and making the same 15 mile drive back and forth to the ATT store and the problem not being resolved, I lost interest in having the service.

I asked the store for a refund of my 750.00. I was told that the money they demanded on the same day that I was supposed to get service, I was going to have to wait 7-10 business days to get in the mail. This was on February 12, here it is March 5 and I still have not received any refund. I was then told by store managers Karen and Joe that the check was in the mail and the hold up was address information, which was how all this started because someone was not doing there job and making sure information was entered in correctly. I was not even notified that there was an address error. I gave them a contact number for that reason. I called again today March 5 and was told the check was in the mail and I should receive it in 7 days. Are you serious! Why should I be required to wait for something that was taken, yes taken and nothing was bought. As far as I’m concerned that’s stealing. So now I don’t have a iPhone because I could not get service and I don’t have my 750.00.

We asked Richard if the high deposit struck him as odd and made him reconsider. He responded:

Yes, I know. Trust me thats the same thing that I said. I know my credit is not great. I believe it is somewhere around 560 – 580. My thing was that as all this was going on I could not even get an explanation as to why the deposit was so high. Most are 500.00 tops. But I just want people to know that this kind of service should not go on. I have reported them to the BBB and the Attorney Generals Office as well.

After another 2-3 weeks I received my monies back but no compensation for time off work and inconveince that all that has caused me. ATT stated that they have no control over the deposit and cant offer me any service because I dont have an account with them. Well thats obvious, the reason that I dont have an account is because they were screwing things up when I gave them the money to set it up.

It’s a shame the Death Star didn’t try to keep you as a customer. You could’ve told them that they don’t have the best track record, and that you’d need a small deposit before accepting their business.

PREVIOUSLY: Contact AT&T CEO, Randall Stephenson
Reach AT&T Wireless Executive Customer Service
(Photo: afagen)


Edit Your Comment

  1. Baron Von Crogs says:

    Thats insane. The deposit costs more than the freaking iPhone.

  2. anonvmoos says:

    [insert snarky comment about buying $500 phone when you have bad credit]

  3. weave says:

    Never buy an iphone from an AT&T store. Just get it from Apple direct, then if for whatever reason you fail the credit check you can choose a prepaid plan.

  4. humphrmi says:

    I’m sure the deposit calculation is a function of the cost of the service he ordered, not the phone. But $750 is still mad.

  5. matto says:

    Holy buttraping, Batman! I thought it was universally understood that requiring a $750 deposit is the tactful way of saying “Go away, we don’t want your business.”

  6. mac-phisto says:

    @humphrmi: the deposit calculation occurs even before service/phone is selected, so it’s based entirely on your credit-worthiness.

    @matto: pretty much, but $750 isn’t even the highest. i activated a line for a woman that required a $1200 deposit once. ouch!

  7. Parting says:

    @mac-phisto: While working for a cellphone company, I’ve seen 1000$ deposits (for those who declared bankruptcy recently) and 2000$ deposits (when the account was flagged for fraud, due to identity theft, the only way to remove it, is to contact Equifax directly).

    It sucks, but the deposit is reimbursable and if it helps you to build back your credit… Each person has to decide : is it worth it?

  8. DjDynasty says:

    work 404-236-6000
    mobile 877-707-9205 or 9208
    These are the numbers for Cingular’s Corporate Office. First one is Atlanta, The number listed as Mobile is for Office of the President. One of them supposedly goes to international according to the person in office of the president, but both numbers go to the same desk strangely enough.

    I also have a direct contact who only handles business acounts from the midwest region. Depending on your region, I can pass it on to her. I’ve already e-mailed her a copy of the story so she can follow up on it. She knows I read a lot of these forums, and likes for me to give her a heads up so no customer has to experience sprint style abuse.

  9. mobilehavoc says:

    Yet another reason managing your credit score is critical

  10. ByeBye says:

    @DjDynasty: Please – like that is going to do anything. First off, ATT isn’t the one who make these deposits so high – it’s the customer who has the bad credit – as for putting in the wrong address, shit happens – everyone is human. I’ve done this before and I wouldn’t be suprised if I did it again (been with ATT for quite a while) – When you dial this number you just gave, it won’t help out the “consumer” at all – and as for him demanding compensation for time off work and stuff, well, that was his choice – he could have done it on a weekend (because ATT’s service IS open on Sat & Sun) or done it on his actual time off of work – as for the deposit being mailed out, that is standard INDUSTRY practice – and yes, it typically can take 7 to 10 business days for it to arrive, but however, with mail and other shit, it can take longer than this. I feel for the guy – I really do, as my own deposit for my service with ATT was $1000 (yes, we have to pay a deposit too, regardless if we work for the company or not) – and YES, this was a bad situation, but calling corporate and complaining isn’t going to get him anywhere since he never had working service with us and has gotten his entire deposit back. End of Story is what it should be.

  11. Pylon83 says:

    If his verbal communications are as convoluted as his written communications, it’s no surprise that AT&T couldn’t figure the situation out. I imagine he was just making things worse in the store, by either being angry and unreasonable, or refusing to answer questions. “I already gave you my address, I’m not giving it to you again because you’re going to steal my identity”.

  12. calvinneal says:

    You are actually a representative of ATT? Pretty Amazing that you would represent yourself as an ATT Employee and intersperse your rude comments with “shit”. You must know use of profanity is a violation of the ATT code of Conduct. You have presented yourself as an ATT representative and then spew epithets and vile while blaming the customer. May you be one of the 4300 to get downsized Monday.

  13. Pro-Pain says:

    AT&T sucks. Go to Sprint, they don’t have an Iphone but they will get you up and talking on a cell phone cheap. a $750 deposit is rediculous. They might as well have just told you to “fuck off”.

  14. Pylon83 says:

    I think that’s essentially what they were trying to do. Who want’s to do business with someone that is such a high-risk customer?

  15. Dyscord says:

    Verizon has one of the highest deposits. They wanted 1,000 bucks before I would have been able to get a phone.

    The thing about this that strikes me weird is that AT&T bought out Cellular One. At Cell One, I would have only had to pay $125 deposit. Once AT&T got into the picture, that jumps up to $750.

    I think deposits are a little crazy. Sprint required $100 dollars, AT&T required $725 and Verizon $1000. In some cases, you have to buy the phone too.

    Seems that when the deposit is more than a new desktop computer, it’s not worth it.

  16. SacraBos says:

    Damn, a TracFone is like $75, pay as you go, and no deposit (except as the pre-paid amount). That’s 10% of the deposit! The iPhone is cool (I played with one in the store once), but no phone is worth that to me.

    But anyway, there’s no reason why a deposit refund should take that long.

  17. humphrmi says:

    @Pro-Pain: Funny that you mention Sprint. I had some financial challenges about ten years ago, and my credit rating was really bad. I tried getting residential LD with Sprint and they flat refused, no deposit option or anything. AT&T was the only company that would take my business.

    There’s a million anecdotal stories out there, and overall when you add them all up, I suspect that not one carrier is any better than the other.

  18. ChuckECheese says:

    $750 deposits? $2000 deposits? An ETF + 3 months of service is less than 750. And they’ll cut you off the day your bill is overdue. Sprint even pre-emptively shuts your phone off due to “excessive usage.” Why would anybody tolerate even the suggestion of such extortion? There are alternatives.

    With any luck, soon people will become weary of the thieving and the crumminess and they’ll just start consuming less, because frankly, it’s easier. Here’s an entertaining article sorta on the topic. []

  19. ByeBye says:

    @calvinneal: I’m a big boy. I’ll be okay.

  20. Buran says:

    If you want to try again, enter zeros into the SSN box and it should offer you prepaid service at $60/mo and up.

  21. ellastar says:

    I’ve seen a few $750 deposits for At&t when running a customer’s credit. They’re usually customers who have a lot of debt (one had a few hospital bills) or just bad credit. Most “normal” deposits (mid-range credit or no credit) are around $200.

    It sucks that it would take 10 business days to get his deposit back (IF they ever get his address right…), but that’s how most companies work. The deposit is taken by the sales associate, but the refund has to be issued by corporate, who has to have a paper trail of the entire thing.

  22. nox says:

    I had to pay a $750 deposit. I had no credit, which I guess they took as bad credit.

  23. Pylon83 says:

    You can thank the countless people who don’t/refuse to pay their bills on time or at all for that one.

  24. TechnoDestructo says:

    How can a business which has a storefront hold money hostage?

    One brick through their window, and poof, that money is gone.

  25. ChuckECheese says:

    @TechnoDestructo: The storefront is just the ‘ho. Unless they like getting beat with a radiator belt, they pass on all that money to the mack daddy at HDQ. If you want your roll back, you have to deal with him.

  26. ChuckECheese says:

    @Pylon83: This comment reminds me of the thread about the Chasid yesterday, and many other threads on here that blame the victim.

    The problem is that the punishment doesn’t fit the crime. A $750 deposit (let alone a $2K one) is far more than AT&T needs to cover potential losses from one customer. AT&T is not going to let your bill get that high before they do something about it (you). The problem with apprehending a guy praying on a plane is that it is overkill.

    Who knows?–AT&T may try to abscond with that money, the way Sharper Image absconded with with everybody’s Xmas giftcards. I had a silly billing problem with AT&T about 6 years ago over a cellphone bill–they duplicated my account and started charging me for 2, even though I only had one–and when I complained, they cut off my service, and then they suddenly charged me about $600 in various fees when I didn’t owe them anything. It was insane–my bill was about $35 a month.

    I wonder how much money AT&T has sitting its accounts from “deposits” that they never have to pay a dime of interest on. The proper response for AT&T to an applicant with a high likelihood of nonpayment, it seems to me, is to refuse to open an account, not to charge a month’s wages–remember, it’s a phone. There are places to go to get most services without opening a line of credit. Of course they don’t come with a bling-y iPhone, but that’s a good thing.

  27. ByeBye says:

    @ChuckECheese: You fail to realize that ATT really doesn’t make a profit from a security deposit. The deposit is an indication that this potential customer is a potential risk due to the poor or lack of credit – after 12 months of perfect payment history, that deposit is given back – so if someone has an account for 6 months, gets disconnected due to not paying their bill, say in that six months, well, then that means they will not be getting their deposit back until 12 months after that disconnect – and if that happens again, well, 12 months start over, HOWEVER ATT does have a cap of 36 months (listed in the Terms of Service–you know, the really large document that nearly no-one reads) before they just fork over the money – however, if a customer decides to cancel whether they have complete the terms of their contract or not, the deposit is returned back in what we say is “up to 10 business days” but really it can take weeks to process and send it out – sorry about my semi-pussy footing around either, as I was at work. I might send in some tips later to the Consumerist about how customers with an ATT Mobility account can sneak around the rules and get out of their contract under certain conditions that we don’t even list in the ToS.

    As for your little problem with having two accounts, that happened because more than likely we (ATT Wireless, Cingular, ATT Mobility, etc) were in the process of switching between two billing systems at that time – and a WARNING to anyone in the North East or South East – come the end of 2008, we will be moving ALL of your accounts from one billing system to another one that everyone else in the country is in – and this double account shit might happen again – but anyways, unfortunately is happens because of human or non-human error, and frankly, with any company that is completely inexcusable. Sorry if this was kind of long and sorry even more if this made little sense. I’m not trying to defend the actions, just saying what really happens. Sorry

  28. MaryLouiseParker says:

    So, I’m confused. I bought an iPhone last November and registered it and everything. I had NO idea they did a credit check on me first. Learn something new every night after 11 I guess.

  29. ChuckECheese says:

    @TheManator: Your post makes sense, and it’s no problem to read a couple paragraphs. AT&T makes money from interest it earns on customer deposits, which it keeps. My problem with AT&T and the 2 accounts wasn’t little–it led to 3 years of near-daily collection calls. It never got fixed, and it’s still on my credit report, 6 years later.

    Write Consumerist with your insider tips–that’s one of our favorite things to read.

  30. ByeBye says:

    @ChuckECheese: Are you still with ATT? If so, maybe you’re due for a courtesy credit ;)

  31. packetscan says:

    The very first thing you do when they ( a company) doesn’t conform to their own rules you write a letter to you states AG..

  32. JustaConsumer says:

    Someone is still using AT&T? That is your problem.

  33. elf6c says:

    You have to if you want some of that sweet iPhonian crack. Unless you want to jailbreak yadda yadda yadda. . .

    Besides, Verizon (show us your Verizon face?!?) isn’t better. Sprint isn’t better. They all suck, thanks to the FCC. Remember that next time you vote.

  34. Serpephone says:

    Working in the Wireless industry for over six years, I sold Cingular for at least three of those years. The customers with $750 deposits were those who owed a balance to either AT&T Wireless or Cingular Wireless from previous service. Keep in mind, fraud is rampant in the wireless industry, so it may not have even been YOUR service!

  35. trujunglist says:

    When I was trying to setup a cell phone for myself shortly after getting out of college with 0 credit every company wanted at least $500-600. I contacted Verizon and they said they could do it for $400 and that they were very sorry and basically hanging up on me. I was like hey wait, I need a cell phone, fine, I’ll pay it. They were absolutely shocked. A year later, I got my deposit back with interest.

  36. Lucky225 says:

    Well I had to pay an $800 deposit when I had GOOD credit b/c transunion removed the only credit card account I had on file at the time b/c I was disputing one late fee that was reported by my credit card company that wasn’t late. Transunion thought I was disputing the account in it’s entirety and removed it from my report, pending investigation. (This was several years ago, wish they’ed remove things while they were pending investigation now-a-days :P). Well that meant when AT&T checked my credit I had none, since the credit card account was the only thing in my file at the time, and it was removed. Once I sorted it out w/ transunion AND had to call my bank to get them to RE-report the account, I had AT&T re-run the credit and refund my $800.

  37. cherryblossum says:

    I recently received the iphone as a gift. I want to activate, but I’m afraid of being turned down due to poor credit scores. I don’t have a bankruptcy, but just bad credit. Will I get turned down? I’m wondering if I should give the gift back to my friend who gave it to me.

  38. temporaryerror says:

    Cherry blossom, give it a shot and see what happens…if nothing else you can do it prepaid.
    Anyway, Tmobile has a new service called Flexpay that lets you go postpaid with no deposit. Not sure how that works but if you are getting huge deposit requirements and don’t want to go prepaid it’s something worth looking into. As far as Tmo goes, I haven’t had a single billing problem in 2 years of being with them.