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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 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.
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