It may be hard to believe, but there are still millions of Americans who are being charged for “leasing” a telephone from what was formerly AT&T. When AT&T was broken up in the mid-1980s, customers were given until the end of 1987 to opt out of their telephone leases and buy their phones. Those who did not do so continued to lease the phones from a new entity, now known as QLT Consumer Lease Services.
Most of QLT’s customers are elderly, and no longer even have the rotary phones they began leasing decades ago. And most of them have no idea that the quarterly bills they are receiving from QLT are actually rental fees that over the years have added up to sometimes thousands of dollars.
QLT defends its business model by pointing out that its customers are entitled to free replacement of any phones that malfunction, and free accessories such as long cords. But since QLT charges $71.40 per year to rent a standard telephone, its customers could afford to buy several new phones and cords every year if they were not paying QLT.
Although the company admitted no wrongdoing, a class action settlement of $350 million was set aside in 2002 to compensate people who had been overcharged for rental payments which vastly exceeded the cost of their telephone equipment. It was estimated that there were 30 million class members entitled to compensation. However, only 92,000 claims were filed, with payouts ranging from $15 to $80, depending on the length of the lease and the number of phones involved. Only $8 million has been paid out to consumers, while lawyers have received between $50 million and $80 million, and $50 million has been given to charity in the form of calling cards. The calling cards expired at the end of six months if they were not used.
However, QLT continues to do business, and there are apparently over one million customers who continue leasing their phones. To visit QLT’s website, go to www.qltcls.com.
Kraft & Associates, P.C., is a federally designated Debt Relief Agency under the United States Bankruptcy Code. We assist people with finding solutions to their debt problems including, where appropriate, assisting them with the filing of petitions for relief under the U.S. Bankruptcy Code.