AT&T CallVantage Drops Rates – But Not For Existing Clients!

For those of you that read my previous Guide to Free Internet Phone Calls or my horrible issues with Packet8 service, you’ll recall that I have long been a supporter of ATT CallVantage service.

Well, I was upset to learn today that AT&T has quietly lowered the monthly rates on their CallVantage service without notifying existing customers of this fact – or adjusting their billing!

The only reason I discovered the price drop was that I went to the site to update my credit card info. They had changed the site around, so I had to search a little and that’s when I noticed the rates had dropped.

That would be great news, except that they’ve still been billing me the higher rate for God only knows how long.

This is a very upsetting situation, primarily because I know some executive at AT&T purposefully made the decision to do that. How do I know? Because when I was a Vice President for a global telecom provider I had to make that same decision on more than one occasion. And believe me this isn’t a case where someone just “forgot” to mention it.

When a company is forced to drop rates because of market forces, such as competition, they have to make a decision whether or not they are going to notify existing clients.

They are faced with two decisions:

1. Drop the rates proactively for all existing clients, which results in a huge aggregate billing decrease. (100,000 clients X $5 a month = $6 Million a year) This negative hit will absolutely affect the management team’s bonus, which at the VP level could be $tens of thousands.
2. Quietly lower the rates to attract new clients, but only lower them for existing clients if they notice and ask for an adjustment. The negative impact is much smaller, although client anger is much greater resulting in a higher churn rate.

In this case, the management team obviously took the selfish, short term benefit option – much to the detriment of existing clients. (I wonder it there are grounds for a class-action suit here?)

This move is particularly distasteful because CallVantage used to charge $25 before bumping up to $30. Obviously they must have been hemorrhaging clients to their biggest competitor Vonage (who has always charged $25) so they decided to come back down.

But for the loyal customers who stuck it out through the period of cost increase this is not what I would consider a “just reward”.

Here’s what I recommend:

1. Help spread the news to existing CallVantage clients. You can socially bookmark this article (above), blog about it yourself, or e-mail to people you know.
2. Either call, or go to AT&T’s e-mail contact page and demand a billing adjustment and a back credit for months you were charged the higher rate.
3. If you don’t get satisfaction, switch to Vonage.

Here is a copy of the e-mail I sent to CallVantage billing. Feel free to use it if you like:

I have been a client of CallVantage for years. You raised the rates to $30 per month some time back and now I see you have lowered them back to $24.99 (http://www.usa.att.com/callvantage/plans/index.jsp) however you have still been charging me $30!

This is a betrayal of loyal clients such as myself. I would like my billing plan corrected to the current rate and I would like a credit for overpayment in previous months.

I am surprised that AT&Ts management team clearly made the decision not to notify existing clients that rates had dropped. I believe this demonstrates a malicious willingness to betray client confidence.

Please notify me via e-mail upon issuance of credit and correction of the billing rate.

I will post a reply in the comments whenever I get some sort of resolution from AT&T.