AT&T is riding high after its big win against the U.S. Justice Department in its effort to acquire Time Warner. While the transaction was able to go through without any stipulations placed on the combined companies, some of AT&T’s past bad acts are rising to the surface thanks to some investigative reporting.
AT&T employees — with direction from their superiors — are accused of using unethical sales practices in order to drive up subscription numbers for the DirecTV Now streaming service. DirecTV Now is a paid service that is competitive with Sling TV, YouTube TVand Hulu Live TV. As more cord-cuttersdrop their traditional cable and satellite TV packages, streaming “skinny bundles” have become the new battleground.
The first tactic seems “innocent” enough. AT&T employees would offer to sign-up customers for a free trial of DirecTV Now (which would boost their sales numbers), and then offer to cancel the trial before it automatically renewed. Canceling a trial for a subscriber is against company policy, but employees were reportedly told to carry out the practice anyway by their managers. And as you can imagine, there were plenty of sales associates that simply “forgot” to cancel the trials, leading to customers seeing unexpected charges for $35 on their bills after the trial expired.
“We were told by managers to cancel it to avoid any future headaches but a lot slips through the cracks,” said Abraham Buonya, one of AT&T’s top sales associates in Hawaii before he was fired by the company after an internal audit.
However, it doesn’t end there. A more sinister plot involved signing up customers for multiple trials of DirecTV Now. If a customer agreed to sign up for a DirecTV Now trial, a sales associate could use a customer’s credit card to activate up to three trials at once. Here’s how it worked: AT&T stipulates that a single credit card cannot be charged more than $35 during trial period. However, during special promotions when AT&T was offering trials for $10, three sales could be crammed in at once with the help of some fake email address.
“My manager picked up my iPad, which was signed in under me, made a fake email and then activated a Direct TV Now subscription on that email and then said if I can do it, here you go, you can do the next one,” said an anonymous AT&T employee that was also fired.
As if that wasn’t enough, there was one final trick that sales associates had up their sleeves. If a customer came into an AT&T store to purchase a new smartphone, they were told that an additional fee would be required to complete the transaction. This was of course a lie, but sales associates would then say that they could waive the fee if customers signed up for a $10 DirecTV Now trial — which of course was priced below the made-up fee. Needless to say, many customers signed up for the DirecTV Now trial because they thought that they were getting a better “deal”.
“The managers basically encouraged us and informed us of how to manipulate sales,” added Buonya. Even if this was a ploy by managers to inflate sales numbers, it was still against corporate policy. Both the managers and sales associates should have known this, but they claim that they carried out these practices to meet sales goals and compete with other regional stores.
For its part, AT&T issued the following statement, “Last fall, we detected some simultaneous customer orders and cancellations of a free product trial. We determined some employees had violated our policies and based on our findings we took appropriate action.”