Forgot your password?
typodupeerror
The Courts Communications The Almighty Buck United States

DC Sues AT&T For Unclaimed Phone Minutes 145

Posted by timothy
from the sheila-dixon's-mistake-was-subtlety dept.
Suki I submits news that Washington, D.C.'s attorney general has filed suit (District of Columbia vs. AT&T Corp, Superior Court of the District of Columbia), claiming the city has the right, through laws applying to unclaimed property, to unused calling-card balances held in the name of D.C. residents. "The suit claims that AT&T should turn over unused balances on the calling cards of consumers whose last known address was in Washington, D.C. and have not used the calling card for three years. 'AT&T's prepaid calling cards must be treated as unclaimed property under district law,' the attorney general's office said in a statement. ... [That sum] represents some 5 to 20 percent of the total balances purchased by consumers who use the calling cards. States and municipalities have often similarly used unclaimed property laws, known as escheat laws, to claim ownership of unused retail gift card balances." Suki I links also to Reason Magazine's coverage.
This discussion has been archived. No new comments can be posted.

DC Sues AT&T For Unclaimed Phone Minutes

Comments Filter:
  • by LostCluster (625375) * on Sunday January 03, 2010 @09:00AM (#30631148)

    This is law in many places... leave a balance in a bank account and fail to respond to any correspondence or make any transactions, and that money is transferred to the government who will publish your name in a massive newspaper insert, and then give it back to you if you claim it by proving the social security number the account was under is yours, and if that times out it goes to the government to do whatever they want with it.

    Gift cards in many places have taken up the retailers on "if this fee is not allowed by law" to kill off inactivity fees. You now have many years or until the store shuts its doors for good (even during a post-bankruptcy liquidation that operates under the store's name) to use that money.

    So, why does AT&T and the other phone companies think they can get away with voiding cards they don't hear from for three years and keeping the money? It's an unclaimed balance, and businesses aren't allowed to profit from such things in many other cases... what's the difference?

    • by BBCWatcher (900486) on Sunday January 03, 2010 @09:17AM (#30631212)
      I don't think AT&T is voiding the cards. Washington, D.C., seems to be asserting that the card numbers should expire after three years. But why 3 years? Why not 5? Or 7? Or 10? Or 50? I assume AT&T will argue that 3 is arbitrary and, of course, too little time. I also assume that AT&T will argue that a certain federal agency in Washington, the FCC, regulates all things telephone, so (dear District), kindly go take it up with them. And, if those two arguments don't work, naturally AT&T would provide the District with about 386,200 calling cards, each with an average of 6 minutes of call time remaining, so that the city government can hold onto the actual unclaimed property until citizens reclaim their cards. After all, those citizens purchased minutes, and that's the unclaimed property in question. There's no cash there any more.
      • Re: (Score:3, Interesting)

        by mewshi_nya (1394329)

        Don't most phone cards say the minutes actually DON'T have a cash value?

        • by asdf7890 (1518587) on Sunday January 03, 2010 @10:00AM (#30631368)

          Don't most phone cards say the minutes actually DON'T have a cash value?

          Can't most governments ignore such small print unless it is somehow enshrined in law (so the lawyer fight induced by trying to ignore said small print would be more costly than the potential gain). Many software EULAs state things that are quite patently not legally enforceable in most jurisdictions - I'm guessing the small print on phone cards and similar have no more basis in law than an EULA.

          • Yeah, you have a point. Very nicely done.

          • Except the line about no cash value is also on the packaging, IIRC. Which means that unlike a EULA, the contract is defined before you buy the product.

            • by asdf7890 (1518587)

              But that still does not explicitly mean that the contract (well, that part there-of) is legally enforceable in all jurisdictions.

              It is not uncommon for employment contracts, which are supposed to be read in detail before signing, to have clauses that are not actually enforceable and therefore effectively void. Overzealous non-compete or IP related clauses are the most regular examples of this. A clause being in a contract does not necessarily mean that is it legally enforceable, or legal at all, and even if

          • Except, I paid sales tax to purchase the card, I didn't deposit money into the account. Therefore, the card is the product/service, not the call.

          • but I paid for access to MINUTES of phone time in an account, and the contract to use the minutes expires in a limited amount of time. That's an entirely valid contract. Those unused minutes do not convert back to "property" anymore than I get a refund on my parking meter if I only use half the time parking my car. (take that District... and a car analogy to boot!)

            The District is after the monetary value... which will conveniently amount to below the limit for reporting "unclaimed property" the exact same t

        • Re: (Score:3, Informative)

          by DJRumpy (1345787)

          They have intrinsic cash value for the balance on the card. It would have no value outside of the company who issued it as it wouldn't be legal tender at, say, the local sandwich shop. "No Cash Value" is typically something you see on things like poker chips, and game tokens and such. Return them to the company who issued them and they will honor it's value. That phrase simply means you won't get any value for it outside of the issuing company.

          • Return them to the company who issued them and they will honor it's value.

            Unless "no cash value" is next to "non-refundable".

            • by DJRumpy (1345787)

              They aren't asking for a 'refund'. They are asking that the remaining balance be transferred to another holder.

              This type of thing is done all the time by states using unclaimed property laws.

              • They are asking that the remaining balance be transferred to another holder.

                No cash value, non-refundable, and non-transferable without the original card. Look at any stored value cards that may linger in your wallet; for everything you suggest, a lawyer has thought of a "non" to get around it.

                • by DJRumpy (1345787)

                  Your suggesting a company can simply ignore a law because they print something on a card? They could print anything they wanted and it still wouldn't dissolve the states right to unclaimed property.

                  • Re: (Score:3, Insightful)

                    by hairyfeet (841228)

                    What I don't get is why a usually libertarian sanctuary like /. doesn't seem to have a problem with the states grabbing unclaimed property? Hell both sides are already taxing and spending like there is no tomorrow, why should they have the right to grab someone's stuff because they haven't used it in x amount of time? What business is it of theirs?

                    We already have them practically turning us upside down and shaking in hopes of loose change falling out, lets not give them more ways to snatch, okay?

                    • by phoenix321 (734987) * on Sunday January 03, 2010 @02:49PM (#30633340)

                      I think the general principle behind that would be

                      "This valuable item is not in use, it is not on private property, its rightful owner has for all intents and purposes forgotten that it existed anymore and will very likely not use it ever again. But all citizens have an interest in not letting value vanish, so it is appropriate that the disclaimed value is transferred to the State to use it. That way, all can benefit from lower taxes and higher revenues. No one is hurt, because the value was disclaimed long ago and would have otherwise benefitted someone who's not the rightful owner or no one at all when the value finally vanished."

                      AT&T or any other gift card issuer have the money and never had to deliver any goods. They are not the rightful owner of the money unless they found a way to hold up their part of the deal. Letting them keep the money for unredeemed gift cards would be an unjust benefit for them, even introducing an incentive to prefer "store money" instead of Fed Money. Because it is impractical to have all stores track down the gift card buyers, the State can reappropriate the funds and put them to use before the store goes bankrupt or moves out of state and the monies are finally lost.

                      I'm surprisingly okay with that, because I think it reduces the incentive of businesses to use anything other than the green Fed Money known the world over or to devise schemes that leave over untold uselessly fractioned monies. The State as a catch-all for fall-out from the daily business routines is not impractical. Use it, claim it or the State puts it to good use for you before it is lost.

                      The State better not even think about applying that principle to real estate or bank accounts held in real currency. These are property forms especially chosen to store value as they are unperishable. Reappropriating them is only acceptable when their owner died and absolutely no living heirs can be found for twenty years. But anything else than that will warrant an early Guy Fawkes day.

                    • What I don't get is why a usually libertarian sanctuary like /. doesn't seem to have a problem with the states grabbing unclaimed property? Hell both sides are already taxing and spending like there is no tomorrow, why should they have the right to grab someone's stuff because they haven't used it in x amount of time? What business is it of theirs?

                      We already have them practically turning us upside down and shaking in hopes of loose change falling out, lets not give them more ways to snatch, okay?

                      This is /. AT&T is a giant evil monopoly. So, just like Microsoft, /.ers don't care about reality, they just want to bash the monopoly in question.

                    • Re: (Score:3, Interesting)

                      by dgatwood (11270)

                      This valuable item is not in use, it is not on private property....

                      Let me stop you right there. You're already wrong in the second part of your basic premise. As far as the owner of a gift card or calling card is concerned, there's no account. They put money on a card, and thus as far as normal people are concerned, they perceive that the card has a certain dollar value. That card is in their possession on private property. Therefore these laws cannot legitimately be enforced against such monetary inst

                    • by gmhowell (26755)

                      AT&T hasn't been a monopoly since before most Slashdotters were born.

                    • But all citizens have an interest in not letting value vanish, so it is appropriate that the disclaimed value is transferred to the State to use it.

                      Kind of like all that manufactured capital that was destroyed in 'Cash for Clunkers'. Oh wait...

        • Actually they do clearly state their cash value. The card regardless of the number of minutes associated with it is worth $0.01 USD.

      • Re: (Score:2, Insightful)

        by BCW2 (168187)
        The spendocrats in DC see potential untapped money to waste?
    • When I, as a consumer, purchase a pre-paid card with X number of usable minutes on it, I typically plan on using the whole thing, OR I'm not that concerned, because the ability to make some phone calls, as needed, is what I'm really paying for to begin with. If the fine print on the card informs me, before the purchase, that there's an expiration date on the card - then fine. I can opt to accept that, or decline the purchase if I think that's unacceptable.

      I don't really have a problem with the phone compa

      • by shentino (1139071)

        Inactivity fees are IMO a valid way to make up for the costs of keeping the card's serial number active. Obviously they have to keep track of every single card that has value or you won't be able to use any of its value, and the maintenance of that data costs money.

        • by Omestes (471991)

          But this price would be a fraction of a cent per card for most cards. How much money does it cost to maintain a database with millions of numbers? A large percentage of this cost would be normal operating costs which is included in the price of the service/card.

          This generally isn't about the price of upkeep for one number in millions, this is about trying to grab excess money to pad the bottom line. This might be good or bad, but lets be honest about it.

          I used to be a customer at Chase Bank, I had a chec

    • by lpq (583377)

      They do this on my unclaimed minutes each month...er is that not the same?

  • Lawyers (Score:3, Interesting)

    by ebonum (830686) on Sunday January 03, 2010 @09:17AM (#30631210)

    Wow. I gotta hand it to them. It is times like this when when we should all take note of how lawyers really are a breed apart. I understand the theory, and it does makes sense. Mind you, understanding and agreeing are not one in the same. But how twisted do you have to be to come up with stuff like this? I never would have thought of that!

    As the said in the LotR about the lawyers foreclosing on the shire ( I think it was LotR, The Revenge ).
    "There's something strange at work here. Some evil drives these creatures, sets its will against us."

  • Next week the AG will be suing "massage" parlors for unused "buy ten get a freebie" cards!

    • by drinkypoo (153816)

      Next week the AG will be suing "massage" parlors for unused "buy ten get a freebie" cards!

      Rest assured, the AG gets freebies already. That's what it means to be in a position of power.

  • Level playing field (Score:2, Interesting)

    by tp_xyzzy (1575867)

    This action sounds like they're trying to prevent at&t to get unfair advantage over selling stuffs they have no intention to provide service for. They probably bundled minutes with some product and most of their customers payed for the service, but never intended to use it. So at&t got unfair compensation for selling bogus service.

    If practises like this are not removed, the market will be full of gift cards and calling cards, with most of the people's money going to something they're not going to us

  • They've been screwing us for years. What ever happened to the anti trust laws that smashed them into baby bells? I'm tired of over paying for electrons. Telecom is a major rip off, mostly we pay for advertising. We should make them pay.
    • by dbcad7 (771464)
      The company you think of as AT&T is really a re-branded SBC and has only been AT&T for 5 years.. They are not also the only ones who have done the merge and get bigger thing.. In souther California I was a GTE customer, they became Verizon.. then when I moved to Northern Cal I was a PacBell customer who became SBC.. then when I moved to Reno I was an SBC customer who became AT&T... To tell you the truth, I think it hurts these companies to merge their different offerings under the same name.. Fo
      • by llefler (184847)

        The company you think of as AT&T is really a re-branded SBC and has only been AT&T for 5 years.

        The company you think of as a re-branded SBC are reassembled parts of the AT&T that the DOJ broke up in 1984. 4 of the 7 baby Bells and the AT&T long distance company. Bell Atlantic and NYNEX became part of Verizon, and USWest became part of Qwest.

        Bell_System_divestiture [wikipedia.org]

        Probably the only real obstacle to completely re-assembling the old AT&T would be Gov't objections to AT&T and Verizon c

  • I don't mean gift cards. I'll rant about them in a minute. But phone cards; we're talking about truly minimal data here, it's one row in a database. AT&T could issue phone cards for years before the amount of data they'd have to store would become an undue financial burden to their evil empire, death star asses.

    Gift cards are lame: Why not just give the gift of cash if you care so little about someone that all you can do is send them to a store you think they would like? Gift cards: the gift that says "

    • I prefer gift cards to certain places, because then no one can bitch about how I spent them. Get a gift card for, say, an electronics store? "Well, I HAD to use it, all they sell is electronics, so I bought a new $toy!"

    • by tepples (727027)

      Why not just give the gift of cash

      You can't mail cash.

      • by russotto (537200)

        You can't mail cash.

        Sure you can. It's not really the best idea in the world as there's no recourse if it's lost or stolen, but there's no law against it.

      • by Darundal (891860)
        No, but you can mail a check, which is redeemable for cash.
    • by OhPlz (168413)

      I used to work in the phone card business. We had all sorts of calling card programs. There were promotional cards (buy three packs of diapers, get twenty minutes talk time), we had cards for telco providers to rebrand (like AT&T), we had the convenience store quickie cards that were use and toss, and so on.

      Most of them were use and toss. The whole program was meant to have a certain life span, then we shut it down and finalized all the accounting on it.

      We knew not all the minutes of all the cards wo

      • by winwar (114053)

        "We knew not all the minutes of all the cards would be used. We would estimate how much wouldn't be, and factor that into the cost of the program. If by some fluke, it was all used up, we would have lost money. Instead, we'd usually be close and it would keep the cost of the minutes down as well as give us (the service provider) and the company selling the cards a useful profit."

        Or they could run a simple and useful promotion designed not to screw the customer over. One that would benefit everyone. I know

        • by OhPlz (168413)

          It would cost more. What part of that don't you understand? You think you're "getting screwed" less by paying a lot more for the card?

          These programs can't run forever. The toll free numbers cost money, having customer support set up for it cost money, the carrier circuits cost money, the switch and servers cost money, the techs to run them cost money. That's why the programs have a definitive end date. That's why the cards are sold with a set expiration date.

          No one is "getting screwed". The cards are

  • by jparker (105202) on Sunday January 03, 2010 @10:51AM (#30631626) Homepage

    So anything that's unclaimed like this defaults back to the city? I wonder what they're going to do with the remainder of everyone's unclaimed, unlimited internet access each month. Did they pool the unused hours off of old AOL CDs? What about all-you-can-eat buffets? Solved DC's hunger problems right there.

    • by tomhath (637240) on Sunday January 03, 2010 @11:15AM (#30631770)
      They already keep unused time on parking meters. I'd like some way of reclaiming that.
      • Those parking meter minutes are reclaimed. It is a government that operates them and collects that revenue, is it not?

        However, I greatly dislike parking meters. Same as red light cameras, the intent is not only for safety or reducing demand for scarce resources by charging for them and collecting that small change, it is also to generate violations, which thanks to the huge fines is much more lucrative. I almost never park in a metered spot. Too much risk of getting a parking ticket, too much underhan

    • Re: (Score:3, Funny)

      by BlueParrot (965239)

      So anything that's unclaimed like this defaults back to the city? I wonder what they're going to do with the remainder of everyone's unclaimed, unlimited internet access each month. Did they pool the unused hours off of old AOL CDs? What about all-you-can-eat buffets? Solved DC's hunger problems right there.

      Dear Sir/Madam

      We find your ideas intriguing and would like to subscribe to your newsletter.

      Best regards:
      The lawyers

    • Damn, Comcast etc. are going to hate this! Imagine all that unused bandwidth each month, under the 250GB or whatever cap. The city will be able to give free internet access to all residents with this unclaimed bandwidth.
  • There is another reason for governments to escheat funds that I haven't seen posted. It is a fact that governments make a tidy sum of money off of these transactions, as many escheated funds are never claimed. For some governments, it is a material source of revenues.

    For that reason, governments are not aggressive in alerting taxpayers that they are holding their funds. Some US states have an on line mechanism for submitting a claim, and most government put a legal notice in a paper once a year, but the

    • I'd bet the unused $5 per account doesn't meet the minimum amount to bother with posting.... hence the want for the big check of all the aggregate amounts!

  • Can't believe that your country spends resources on such stupid things. Maybe they should think about worthwhile things, and put stuff like this lower on the list -- say below airport security.

    In any event, here's why this is stupid.

    First, they may be unused, but they aren't unclaimed. You purchased a service from AT&T, not property. AT&T still owns them.

    Second, the whole unclaimed property when it comes to money in stale bank accounts is because money is also owned by your country. It has to be

    • It has to be, otherwise you could burn it and actually make your country poorer. The mint can't just print more money.

      No law against burning money. I've never bothered, mind you, but I will if someone tries to make it illegal.

      And yes, the mint CAN just print more money. It's called "inflation".

    • Re: (Score:3, Insightful)

      by Stanislav_J (947290)

      Your country spends way too much time litigating stupid shit instead of actually solving problems.

      Hey, you have to go with whatever talents you have. We happen to be very good at litigating stupid shit, thank you. Actually solving problems, not so much....besides being a lot harder, it might actually reduce the amount of stupid shit available to litigate. Then where would we be? Who's going to pay to retrain all those out of work Stupid Shit Litigators? We might get desperate and have to import other countries' stupid shit to litigate. What would that do to our balance of trade?

      Clearly, you just do not

  • It will depend on the state when it comes to gift cards. But, unusued phone minutes?

    Won't it devalue the profit the phone company is making off of them? Think about it. The phone company sells these minutes knowing a certain percentage will probably expire. And I assume it's not 100% profit for the phone company when they sell these minutes. So, won't they adjust the price knowing 100% of all the minutes sold will end up used?

  • Dear Washington DC (Score:4, Informative)

    by Dunbal (464142) on Sunday January 03, 2010 @01:31PM (#30632588)

    I admit that I am a "deadbeat". I have some rather large, unclaimed and unpaid debts that are over 3 years old. Please let me know when you wish to take those over from me. Thanks...

    Oh wait, how come it's different suddenly?

    • Re: (Score:3, Insightful)

      by Greyfox (87712)
      If Washington DC took them over, I bet they'd be a lot more effective about getting you to cough up the cash.
    • by Burning1 (204959)

      Remember that debt has value, just like cash has value. There are situations where debt may be transferred between agencies (collections is an obvious example,) permitting other entities to collect on the debt.

      Personally, I'm not sure I'd want the government tracking me down to collect. Based on the stories I've heard, they seem to be pretty good at it (See IRS.)

  • I have the right to any tax dollars unused by the years end.
    I have the right to any unused dinners and reservations wasted by D.C. politicos.
    I have the right to any call girls paid who were unused because of erectile dysfunction of Senate,Congress and Cabinet.
    I have the right to do the unused trophy wives as well.
    I have the right to any liquor they have unused by years end.
    Don't forget I get all your unused minutes too.
    So clear the way, myself and a legion of well armed lawyers will be overtaking D.C. next

    • by Ksevio (865461)

      I have the right to any tax dollars unused by the years end.

      Like THAT ever happened. More likely you'll get the right to any deficit at the years end.

      • by flyneye (84093)

        Wait'll you see how me and the crack of my ass handle the deficit and any bills from World Bank.
        I'm takin' us completely out of the system, setting a good example for the rest of the world.
        Viva da revolution!

  • by rdean400 (322321) on Sunday January 03, 2010 @03:41PM (#30633632)

    I personally hate gift cards and calling cards, but I think this suit needs to fail for several reasons:

    1) The consumers that bought the cards paid for minutes. They did not deposit money on their cards, and minutes are not legal tender currency.

    2) Many gift cards don't carry expiration dates. If the governments do this, it will force card issuers to put an expiration date on the cards.

    3) Success in this litigation will embolden other governments that are looking for ways to close budget shortfalls without doing the fiscally responsible thing and cutting wasteful spending. Unfortunately, the first place where most governments choose to cut spending, instead of looking for waste, is in the school districts, police and fire precincts. Threatening cuts in those services makes it easier to justify doing stupid things like this, or raising taxes.

  • I've wondered how long it was going to be before states start applying escheat or unclaimed property laws to unclaimed mail-in rebates that seem to infest the retail electronics business. For governments facing massive deficits, there's a lot of money sitting there, smiling provocatively.

  • Looks like someone on the DC council saw one of those AT&T ads with the "unused minutes mom" and thinks the company has an actual physical hoard of unused minutes somewhere.
  • Hey, I pay for 1400 minutes every month, but use about 200. D.C. should be claiming those 1200 unused minutes as well!

Man is the best computer we can put aboard a spacecraft ... and the only one that can be mass produced with unskilled labor. -- Wernher von Braun

Working...