MONEY cellphones

3 Promotions That Show Sprint Is Desperate for Your Business

Sprint store sign
Andrew Harrer—Bloomberg via Getty Images

Sprint is offering crazy-sounding deals right now, including hand delivery of new phones. But that doesn't mean the wireless provider offers good value.

Sprint just announced that it will hand deliver new phones to customers’ homes and then help them set up the devices. The new promotion is set to start in Kansas City (near Sprint’s Overland Park headquarters) before rolling out to Miami, Chicago, and the rest of the United States.

Yet for anyone paying attention to the industry, the promo reads more as an act of desperation than a great deal. Though Sprint has been holding on to about 16% market share for the last few years—about the same as T-Mobile, and half as much as top-two carriers Verizon and AT&T—it has poor customer satisfaction rates and an especially high “churn” rate, or percentage of customers who dump their provider each quarter.

To be fair, the “D” word gets thrown around a lot when cellphones are being discussed. Last year, T-Mobile CEO John Legere accused AT&T of being “desperate” by offering a $450 buyout plan for customers who jumped ship from rival carriers. Then, days later, T-Mobile upped the desperation ante by offering its own $650 buyout plan—and AT&T quickly (and quietly) ended its offer. And it’s not just wireless carriers: Reviewers of HTC’s new “Uh-oh protection” program have called the deal desperate, since it offers a free replacement if you break your phone within the first year. Even iPhone users with AppleCare+ don’t get totally free phone replacements.

But Sprint in particular has garnered much attention over the years for especially desperate-sounding promotions. Here are 3 signs the company really, really wants your love.

1. Sprint will meet you at Starbucks, the gym, or wherever

The company’s new hand-delivery promotion offers a time-window precision that might make even Amazon Prime customers jealous.

“We will deliver pretty much anywhere… and it’s an exact-on-time delivery,” Sprint vice president Rod Millar told The Verge. “You can tell us ‘6:45, and meet me at McDonald’s.'”

Sounds convenient, but also potentially awkward—particularly for the Sprint “expert” who gets to roll up in this extremely cool-looking car and wait for you to finish ordering your fries.

2. Sprint will cut your AT&T or Verizon bill in half

This past December, Sprint announced it will now give you a 50% discount off whatever monthly fee you were paying AT&T or Verizon if you cancel your plan and switch.

Of course, the company also uses the promotion to get you locked into one of its various device programs. Those include the “iPhone for Life Plan,” which is not so much a chance for you to get a free new iPhone every few years (like it sounds) as it is a lease program in which you pay a monthly fee on top of your service charges—and do not technically own the phone.

3. Sprint will give you $550 to ditch T-Mobile

If you trade in your T-Mobile phone, you get $200 upfront from Sprint, plus up to $350 per line for dropping your T-Mobile contract.

Given that Sprint is in serious danger these days of slipping behind T-Mobile in the cellphone wars, this promotion makes sense. In 2014 alone, the company bought back more than 3 million phones from rival carriers.

Then again, if it wants to earn back market share, the service provider might want to focus less on promotions and more on, well, service. Sprint’s poor coverage kept it off of MONEY’s Best Cellphone Plans list last year, and despite some improvements, the company still ranks below its peers according the most recent report by RootMetrics, a company that rates mobile plans.

TIME Smartphones

The 13 Best Free Smartphones You Can Buy

Motorola Mobility Portfolio Launch Event
Daniel Boczarski—2014 Getty Images Motorola announced the new Moto X and G, Moto Hint and Moto 360 by opening its headquarters for media to meet the engineers and designers committed to offering people more choice, control and accessibility in their personal technology.

$0 down can actually go a long way

Walk into any AT&T or Verizon store, and you’ll see a shelf full of $0 phones, complete with cheap knock-offs, devices that can’t connect to the Internet, and old handsets from 2012. Make no mistake: when it comes to free phones, you usually get what you pay for.

Here and there, however, you can find a great phone for $0 down. Some companies will offer discounts on devices in a less popular size, while others will drop prices significantly a year after release. Even some of the best flagship models from top brands—like Apple, Samsung, HTC and LG—will eventually drop their prices to $0, as long as you know where and when to look.

With this in mind, we set out to find the best free phones on the market today. Each of the devices on this list will cost you $0 from at least one carrier, as long as you’re starting a new contract.

How did we pick and rank the list? We started with a list of phones that can be purchased for $0 with a new contract. We then looked at specs, features and expert reviews to calculate a Smart Rating for each device. Finally, we ranked our list by the overall ratings, using release date to break ties (the newer the device, the better).

We’ll start with number 13 and work our way to the best free phone of all.

LG Enact

Smart Rating: 79/100
Release: August 2013

For customers who miss physical keyboards, the LG Enact hides a full QWERTY set-up right underneath its full 4-inch display. It’s the sort of design you’d have to pay half a grand for in 2007. Today? You can snap one up for $0 with a contract.

Samsung Galaxy S4 Mini

Smart Rating: 84/100
Release: May 2013

Samsung fans hoping to save should give a hard look at the $0 Galaxy S4 Mini, a phone with signature Samsung quality, but costing hundreds of dollars less than the newest models.

Motorola Moto G

Smart Rating: 84/100
Release: November 2013

Praised for its pure Android experience (no needless frills or odd augmentations), the 2013 Moto G remains a smart, sensible buy for people who live on Google services like Gmail, YouTube and Maps.

BlackBerry Z10

Smart Rating: 88/100
Release: January 2013

The Z10 was BlackBerry’s best attempt to produce a modern-style smartphone—complete with the familiar grid of app icons and no physical keyboard. To this day, it’s still a great option for BlackBerry fans who like the way iOS looks but don’t care for Apple’s ecosystem. And best yet, it doesn’t cost a penny.

Motorola DROID Mini

Smart Rating: 89/100
Release: August 2013

Generally speaking, bigger phones tend to have larger—and thus longer lasting—batteries. Take the iPhone 6 versus the 6 Plus: the 5.5-inch Plus boasts over 70% more battery than its smaller cousin. The $0 DROID Mini defies this trend—a 4.3-inch phone with a whopping 28 hours of battery. It’s a rare combination at an unbeatable price.

LG Lucid 3

Smart Rating: 89/100
Release: April 2014

The LG Lucid 3 was made specifically for the tasteful budget phone shopper—someone who wants smooth operation and clean hardware design for next to no cost. The device is also a nice, compact alternative to LG’s parade of big-screen, 5.2- to 6-inch phones.

Motorola DROID MAXX

Smart Rating: 90/100
Release: August 2013

The Motorola DROID MAXX still offers one of the best batteries on the market, capable of going two full days on a single charge. Sure, the performance doesn’t match the latest flagship phones, but if you simply need something reliable, cheap and long-lasting, this is your handset.

iPhone 5C

Smart Rating: 90/100
Release: September 2013

Apple’s pricing structure is steady and predictable: the newest models start at $200, the year-old model at $100, the two-year-old model at $0. This time around, however, the free model (the iPhone 5C) is noticeably different than its more expensive cousins. The newer models feature bigger screens and metal bodies; the 5C sports a plastic shell and compact screen. For some customers, the 5C will be exactly what they want anyway—and they won’t be able to beat the $0 price tag.

LG G Flex

Smart Rating: 90
Release: January 2014

The LG G Flex has a novel, curved display—the sort of unique hardware design you’d normally have to pay extra to enjoy. By now, however, enough time has passed—and a new model has surfaced—to make the original G Flex free with a 2-year contract. The curved display isn’t for everyone, but if you’re intrigued, you can try it for free.

Samsung Galaxy Alpha

Smart Rating: 90/100
Release: September 2014

Samsung’s small-screen Galaxy Alpha has a premium feel and solid performance. It’s the ideal phone for Samsung fans who never joined the big-screen revolution. With the impending Galaxy S6 launch, Samsung has slashed the price on the Alpha, making this an excellent time to buy.

Amazon Fire Phone

Smart Rating: 93/100
Release: July 2014

Yes, the Amazon Fire Phone flopped hard. Sure, the 3D effects were nothing more than a gimmick, and the internals weren’t anything special. A year later, however, the Amazon Fire Phone might actually be underrated. For the Prime subscriber and Amazon shopping addict, there’s still no better phone for optimizing your retail experience. And you can get the whole experience for $0 on day one—a happy consequence of all the bad press.

LG G2

Smart Rating: 94/100
Release: September 2013

You might worry that the LG G2 is a little too old to warrant a purchase, as it was first released in fall 2013. Consider, however, that the LG G2’s performance was at least six months ahead of its time, and that the phone served as the prequel to our Editors’ Choice for Best Smartphone of 2014 (the LG G3). A $0 price tag? On that device? Crazy.

And it’s the best Android phone on this list.

HTC One (M8) for Windows

Smart Rating: 95/100
Release: August 2014

Normally, you have to sacrifice quality to get a free phone, but the HTC One M8 for Windows is both free and one of the best handsets on the market. Why? It all stems from popularity. Most people are on either iOS or Android, so HTC sells the Windows version at a discount. What’s more, HTC still isn’t as popular as Apple or Samsung, so the company is willing to cut costs to compete. Add it up, and the HTC One M8 is the best free phone you can get. If you haven’t tried Windows on a phone before, this is the perfect place to start.

MONEY

Uh-Oh, Maybe Google Is Just as Bad as Comcast

A Google Inc. Fiber broadband network installation box
Julie Denesha—Bloomberg via Getty Images A Google Inc. Fiber broadband network installation box

Google Fiber, the ultra-high-speed Internet and TV service offered in a select few U.S. cities, is taking a page from the classic pay TV playbook by raising rates on some customers.

There is much to love about Google Fiber, Google’s superfast Internet and TV service that launched in Kansas City four years ago and has since spread to Austin, Texas and Provo, Utah, with expansion plans for Atlanta, Charlotte, and Nashville, among other cities. For $70 a month, Google Fiber provides Internet that’s roughly 100 times faster than the national average for broadband. Customers are also given the option of basic Internet on par with other broadband service for free, after paying a one-time fee of $300, or $25 monthly for 12 months.

Perhaps most refreshing of all, however, is that, Google Fiber has shown that Internet and pay TV customer service doesn’t have to suck. In fact, thus far at least, subscribers say that Google Fiber customer service is quite good.

That wouldn’t seem like a big deal in most industries, especially not when it comes to an upstart trying to win over customers from larger existing players. But hated pay TV and Internet giants like Comcast and Time Warner Cable have been bashed as awful, unresponsive, incompetent, and overpriced for so long, that it’s understandable if consumers assumed that this is always how things would be in this business category.

Yet a recent change in Google Fiber prices in Kansas City shows that even Google is capable of resorting to one of the business practices subscribers hate about Comcast—namely, raising rates.

When Google Fiber first launched in Kansas City, in addition to the Internet options mentioned above, subscribers were offered a package with 150+ cable TV channels and the superfast Internet service for $120 per month. According to the Kansas City Star, though, Google just raised rates by $10. New subscribers must now pay $130 per month for the same package. ($130 is also what Google Fiber subscribers pay for the package in Austin, though it looks like it still costs $120 in Provo.)

Google has blamed the price hike on rising programming expenses, among other factors. Regardless of the reason, the change should make it clear that Google is not immune to marketplace forces—and that monthly rates for customers can and probably will keep rising, just like they do with Comcast, Verizon FiOS, AT&T, and any other provider.

Then again, Google Fiber’s price hike only affects new customers. Existing Kansas City subscribers get to keep paying $120 per month for the time being, a policy that essentially rewards these customers for signing up early, and for their loyalty to the service. The standard pay TV price hike, by contrast, punishes loyal customers with monthly bills that rise relentlessly until the subscriber calls to complain and threatens to drop the service.

What’s more, as opposed to the vague, muddled pricing policies of the usual pay Internet-TV businesses, Google Fiber plainly spells out the terms of each plan. The basic Internet service, for instance, is free (after the construction fee) for a minimum of seven years at a given residential address.

Speaking of which, we must point out again that once the initial fee is paid, you can get broadband Internet totally for FREE. Such an idea would be unthinkable for the Comcasts of the world, which jack up fees and monthly rates unconsciously, and which would laugh off the concept of turning off the stream of cash under any circumstances.

TIME stocks

Apple to Replace AT&T in the Dow Jones Industrial Average

The entrance to the Apple Store on 5th Avenue in New York City.
Mike Segar—Reuters The entrance to the Apple Store on 5th Avenue in New York City.

The change will be effective with the open of trading on March 19

Apple later this month will be added to the Dow Jones Industrial Average, replacing AT&T on the key stock market index in the first shake up since 2013.

“As the largest corporation in the world and a leader in technology, Apple is the clear choice for the Dow Jones Industrial Average, the most recognized stock market measure,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices in a statement.

Rumors had swirled for days that Apple would be added to the index, and the electronics gadgets maker has Visa to thank for the change. Visa’s stock split lowered the adjusted price of Visa, which reduced the weighting of the information technology sector in the index. Adding Apple to the index would help partially offset this reduction, S&P Dow Jones Indices said. Apple’s stock split last June was also a factor, as it brought down the company’s stock price closer to the median price in the DJIA.

Shares of Apple were up slightly Friday, while AT&T shares were lower. AT&T had one of the lowest prices among DJIA constituents. AT&T was also bumped because the DJIA was determined to be over weighted in telecommunications, and AT&T has a smaller market capitalization than rival Verizon.

Apple will officially replace AT&T after the close of trading on March 18 and the change will be effective with the open of trading on March 19.

The last change to occur to the DJIA occurred in September 2013, when three new members were added: Goldman Sachs, Visa and Nike. They replaced Bank of America, Alcoa and Hewlett-Packard.

Apple earlier this year achieved another key milestone: it became the first U.S. company with a market value above $700 billion, which added to an already long list of achievements for the electronics titan.

This article originally appeared on Fortune.com.

MONEY The Economy

Internet Activists Near Win in Fight for Net Neutrality

Republicans appear to be ceding the fight against net neutrality for now, but the FCC’s plan still faces stiff opposition.

TIME privacy

How AT&T Wants You to Pay For Your Privacy

AT&T Reports 81 Percent Rise In Q2 Profit
Tim Boyle—Getty Images An AT&T logo is displayed on an AT&T truck July 25, 2006 in Park Ridge, Illinois.

ISP can track your web history and searches

The privilege of not having your every click tracked, saved and regurgitated in the form of targeted ads will only cost you $29 per month on AT&T’s super-fast Internet service.

The company, which just announced it’s bringing its 1-gigabit-per-second service to Kansas City, touts a price tag of $70 per month for the high-speed connection meant to compete with services like Google Fiber. But that’s actually a “premier” offering that allows AT&T to track a user’s search terms and browsing history to serve targeted ads. The standard high-speed service without the tracking costs $99.

AT&T defended the pricing model to The Wall Street Journal by arguing that the ad targeting helps AT&T make more money, which in turn lets customers who participate earn a discount. The model is somewhat similar to the discounted Kindles Amazon sells that show advertising. Companies with free, ad-based services, like Facebook, don’t allow users to fully opt out of being tracked while on their sites.

However, the fact that AT&T is an Internet provider means it could gather a more comprehensive picture of your Web browsing activities than companies with a less intrusive presence. That’s lucrative for advertisers and for ISP’s, but not so great for privacy-minded end users.

TIME Smartphones

You Can Now Rollover Your Unused AT&T Data Into the Next Month

The AT&T logo is seen on June 2, 2010 in
AFP—Getty Images The AT&T logo is seen on June 2, 2010 in Washington DC.

But you'll only have that month in which to use it

AT&T users tired of watching all their extra megabytes melt away at the end of the month have reason to rejoice — the mobile carrier just announced Rollover Data, an upgrade that allows customers to transfer their unused plan data into the following month.

The data that rolls over will only last for one month, which means, for instance, that if you have 5 GB that carried over from last month but only use 3 GB of it, you’ll lose the rest.

The announcement on Wednesday is AT&Ts latest salvo in the tussle with rival provider T-Mobile, which announced a similar rollover feature a few weeks ago.

But AT&T CEO Ralph de la Vega told USA Today that his company, which had pioneered the rollover concept for voice minutes years ago, has been planning to launch Rollover Data for a long time.

MONEY Tech

How AT&T and Verizon’s Loss is Your Gain

A customer walks into a Verizon Wireless retail store in Washington, D.C., U.S., on Thursday, Oct. 23, 2014.
Andrew Harrer—Bloomberg via Getty Images

Get ready for better promotions, lower prices, and more choices.

Change is afoot, and it’s been a long time coming. After T-Mobile T-MOBILE US INC TMUS -0.38% officially kicked off its Un-Carrier campaign in early 2013, the domestic wireless industry was bound to change. CEO John Legere has spearheaded the company’s Un-Carrier strategy, launching a number of aggressive pricing plans and other offers. T-Mobile has since followed up with a string of other new promotions and initiatives, tempting potential switchers to take the plunge.

Meanwhile, Sprint SPRINT NEXTEL CORP. S 0.57% has been struggling, and the No. 3 carrier is counting on its new leadership to turn the tide. Now, the two top dogs, AT&T AT&T INC. T -0.64% and Verizon VERIZON COMMUNICATIONS INC. VZ -0.04% , are starting to feel some competitive pressure as they lose their duopolistic grip on the U.S. wireless industry — and just this week, both companies tempered investor expectations for the current quarter.

Verizon sticks to the high-end

Verizon kicked things off with a news release on Monday that indicated demand for 4G smartphones remains “very strong,” and the carrier continues to see momentum in this department. On top of that, Big Red saw 75% of smartphone upgrades qualify as high quality.

Then came the bad news. Verizon is spending heavily on promotional offers, which is helping drive volumes this quarter. These promotional expenses are expected to pressure its wireless segment EBITDA and will put a dent in profitability. At the same time, the No. 1 carrier also acknowledged that retail postpaid disconnects are on the rise due to intense competition and promotions from rivals. Translation: Verizon is spending big on promotions but continues to lose customers.

AT&T is also feeling the burn of churn

Just a day later, AT&T CFO John Stephens spoke at an investing conference, similarly indicating that the company expects postpaid churn to increase in the fourth quarter. Though Ma Bell will close out 2014 with “one of [its] best years ever” in terms of full-year postpaid churn, this could be the beginning of a troubling trend.

Stephens explained this is the first year that the new Apple iPhones were launched simultaneously on all four carriers, and because AT&T has the largest install base of iPhone users, it similarly faces higher competition targeting iPhone users. However, this is actually incorrect, as the iPhone 5s launched on all four carriers in 2013.

The CFO also dodged a question about whether or not 2015 will see full-year postpaid churn levels rise compared to 2014 — competition is only going to continue escalating.

Can you hear me now?

None of this is to suggest that AT&T or Verizon are seeing a mass exodus of subscribers that will cripple their respective businesses — far from it. Rather, small cracks are starting to appear in the armor of the top two players. Both companies continue to have the largest subscriber bases in the U.S. and have been relatively resilient to pricing pressures, in part because of public perceptions around rivals’ networks.

Carrier Total Retail Subscribers (MRQ)
Verizon 106.2 million
AT&T 86.3 million
Sprint 45.9 million
T-Mobile 42.0 million

Source: SEC filings. MRQ = most recent quarter. Figures do not include wholesale connections or connected devices.

That’s especially true for T-Mobile, which has long suffered from these negative connotations. But T-Mobile has made impressive progress modernizing its 4G LTE network during the past 12 to 18 months. I personally switched from AT&T to T-Mobile recently and saw my cellular data speeds soar by five times in my area (Denver).

T-Mobile is absolutely catching up in terms of network quality and, over time, it will dispel the perception that its network is inferior — the primary goal of its current Test Drive offer. Once that is achieved, price will be the determining factor, and T-Mobile has shown its willingness to go straight for the jugular when it comes to pricing.

Sprint’s fortunes are a little less clear. The carrier stagnated under Dan Hesse and paid dearly for technological missteps including its original choice of WiMAX over LTE. Meanwhile, the company’s heavy debt load — even after the SoftBank capital infusion — limits its ability to invest heavily in network infrastructure upgrades that are extremely capital intensive.

To be fair, Verizon also has a massive debt load after buying out Vodafone’s stake in Verizon Wireless, but the company’s network is already quite mature, so its capital needs are less intense.

You’re the real winner of competition

Competition is only going to pick up in the coming years. T-Mobile has made it quite clear that it has no intention of letting up anytime soon, and it will continue to push against its larger rivals. The Un-Carrier even believes it can overtake Sprint in total customers by year’s end.

The net result of all of this is that you, the consumer, will benefit in the form of better promotions, lower prices, and more choices.

 

MONEY bills

The AT&T Bill That Just Wouldn’t Die

AT&T store with pedestrians rushing on sidewalk below
Richard Drew—AP

A Chicago woman got more than she bargained for when she tried to change her phone-and-Internet service.

When you have a dispute over a bill with a company, sometimes it’s not enough to respond to a collections notice with evidence that the bill has been paid. Sadly, even if the collections firm appears to drop the matter it can still come up again, and again, and again. This is the tale of the bill that just wouldn’t die.

It’s often harder than it should be to close an account. A small remaining balance, sometimes invisible to consumers, can create a big hassle, leading to collections calls and damaged credit – even bills that are several years old for as little as $50 or $100 can really punish a credit score. That’s bad enough.

It’s hard to understand how simply changing service – rather than canceling service – could lead to that kind of red tape nightmare. But that’s exactly what happened to Cathy Nestor, who lives north of Chicago, when she dropped AT&T’s U-verse TV, phone and Internet bundle three years ago and went with only U-verse Internet service.

The trouble started with a $70-something balance remaining on her old bundled account with AT&T’s U-verse, which Nestor claims she paid back in 2011.

Since then, three different firms have tried to collect on the bill, and Nestor says she provided evidence it was paid each time. Still, by the time she wrote to me, she was on the verge of getting reported as delinquent to the credit bureaus.

AT&T, for its part, disagrees with Nestor’s version of events. The company says the old account was never settled (for reasons we’ll explain shortly) and claims her evidence is faulty. Nestor says that the various collection firms never successfully communicated that to her, or didn’t push back when she told them the bill was paid.

The Confusion Begins

When Nestor dropped her U-verse bundle in 2011 but kept high-speed Internet, AT&T gave her a new account and new account number. She says she paid her new bill, thinking it would include any leftover balance from her old U-verse account. It didn’t. But soon after, she realized the error and says she separately paid the old account bill balance of $72 on Nov. 23, 2011. As evidence, she provided me a copy of an electronic payment from her bank statement. (And we should note that she is currently considered an in-good-standing customer of AT&T’s Internet service — that is, on the new account.)

Then the fun began.

She says she got a letter requesting that the bill on the old account be paid. She says she wrote back with evidence that it had been paid, claiming AT&T must have lost the payment amid the account number confusion. About 18 months later, she got a letter from another collection agent demanding that the bill be paid. Again, she wrote with evidence of payment. Then in January 2013 (“Yes, this has been going on that long!”), she received a letter from yet another collections company, Afni Inc., based in Bloomington, Ill., demanding a $79 payment.

“This account has been placed with our agency for collections,” read the letter. “We are requesting your assistance in resolving this matter. We may report information about your account to credit bureaus.”

“I WILL NOT BE PAYING THIS COLLECTION ITEM,” she wrote to Afni, in all caps. (Nestor provided a copy of the exchange for my review). “AT&T has already been paid, and they have tried to sell this off once before. I have already proven to them they were paid. I do not know why they keep trying to collect this.” She concluded by threatening legal action.

Then, nothing. No acknowledgment of receipt. No, “We’re sorry, we’ll drop it,” notice. No new attempt to collect. Silence. It was tempting to think the matter was closed, but Nestor knows consumers should never assume any such thing.

“Just waiting for it to show up again, you know,” she wrote when she contacted me to complain about the repeated collections.

Unraveling the Mystery

I reached out to Afni, and the firm shed a little light on the situation. AT&T had not sold the debt, but was using Afni as a third-party firm to attempt collection.

“When Afni had this account, AT&T was the owner of it—we did not purchase it,” said Debra Ciskey, director of compliance at Afni. “This account was recalled from Afni by AT&T on Aug. 5, 2013, so we are no longer handling it on behalf of AT&T.”

When I asked Ciskey what “recalled” meant, she said Afni was simply instructed to stop attempting to collect on the debt on behalf of AT&T.

“I am sorry that I am unable to tell you what would have happened to the account after we returned it to AT&T,” she wrote.

Ciskey’s responses suggested Nestor’s fear her bill would become zombie debt was well-founded.

“Terrific. I’m guessing that means I still haven’t seen the end of this,” Nestor said, sarcastically. She was right.

Next, I contacted AT&T, and the firm said that Nestor did indeed still owe the money. Emily J. Edmonds, director of AT&T Corporate Communications, acknowledged the payment Nestor made in November 2011, but said it was applied only to her new Internet service account rather than her old bundled account. That left a $79 balance (Nestor and AT&T also disagree on the old account balance).

“This customer has had an outstanding balance on her former account since 2011 that was never paid, ultimately resulting in the bill being sent to collections,” Edmonds said in a statement. “Once we were notified that the customer claimed to be wrongly charged, we conducted a thorough account review and determined the outstanding balance was indeed still owed.”

She also said Nestor had only contacted AT&T directly once during the three-year dispute to complain.

There’s no way to know who’s right about the payment, unless of course Nestor provided proof that the $70-something check was applied to the old account or AT&T provided proof that it was applied to the new account (which should have led to an account surplus, or reduced bill, if logic serves). But we do know for sure that when the third and final collections firm tried to collect, she wrote back with evidence the disputed amount – or something close to it – was paid, and then Nestor heard nothing more.

Edmonds said she could not explain why Afni didn’t respond to Nestor’s letter with further evidence that the debt was owed, and referred that question to Afni.

Afni says a collector is not required to respond to a consumer disputing a debt if it simply ceases collection. “A response is required only if the agency is going to continue collection attempts,” Ciskey said.

And that is one reason some bills never die; it’s also how consumers come to be reported to credit bureaus as late. While Afni could not pursue the debt any further without continuing the dialog by “validating” the debt, that doesn’t stop AT&T from contracting a different collector, or selling the debt.

Margot Saunders, a debt collection law expert at the National Consumer Law Center, said that’s true. The Fair Debt Collection Practices Act requires any firm collecting a debt on behalf of a third party to “verify” the debt if a consumer objects to a collection notice – but only if the firm continues to attempt to collect. Second or third collections firms get to start the process over, and are currently not required by law to keep track of prior collection attempts by others.

Moving Forward

AT&T is now working directly with Nestor to resolve the dispute, so at least for now, she appears to have a happy ending. There is a lesson in her tale, however. She is an example of a concept I call the “exception bin.” Computers and databases are great at handling 99% of transactions. When things follow standard patterns, computers hum along and take care of everything. But once there’s something even a little unique about your situation, you land in the exception bin. And because corporations rely on computers so much, many run into trouble when dealing with items that land in the exception bin. Often, it can feel impossible to get out of it – even if you send letter upon letter providing evidence.

In Nestor’s case, it’s perfectly sensible that she thought she could just keep paying the bills AT&T sent her for U-verse and her account would be current. If you think like a computer, however, you can see how the firm’s computers might handle customers who downgrade from bundled service to a single service. Then, once her bill was handed over to collections, she became an exception that just wouldn’t die. Yes, AT&T used three different firms during a three-year stretch in an attempt to collect a $70-something debt from someone who otherwise seems to be a good customer. And yes, the firm could have seriously harmed her credit over a small bill that she thought she’d paid, that she provided evidence she’d paid, and for which she’d received no response (until the next collection attempt).

So what’s the lesson? In broad strokes, do whatever you can do to avoid the exception bin. Of course, that’s not always possible. Moves happen. Mid-contract cancellations happen. Early service upgrades or downgrades happen. And mistakes happen on both sides. But when they do, realize that your odds of getting caught in corporate red tape go up astronomically. In that case, you must be hyper-vigilant for signs that your exception will soon lead to headaches. Be proactive: Pay a bill, then call to make sure the payment is applied. When you cancel a service, get a letter confirming cancellation and a bill showing a $0 balance. Furthermore, check your credit scores and credit reports regularly for signs of trouble, and dispute any errors as soon as possible. You can get your credit reports for free once a year from each of the major credit reporting agencies, and you can get two credit scores for free from Credit.com along with an explanation of what they mean.

It may seem tedious, perhaps even unfair, but it’s a reality of navigating your way in the 21st Century.

More from Credit.com

This article originally appeared on Credit.com.

MONEY Phones

Sprint cuts rates in half to win AT&T, Verizon customers

The offer is the latest attempt by the third-largest carrier to compete with its larger rivals.

Sprint’s latest plan to compete with its two larger rivals? Woo AT&T and Verizon customers by offering to cut their phone bills in half if they switch to Sprint.

The Overland Park, Kansas company announced that deal on Tuesday, promising “unlimited talk and text” and a matched data allowance at half the rate of what current Verizon and AT&T customers are currently paying for their monthly plans. Billing it as “The Cut Your Bill in Half Event,” Sprint also promised to pay up to $350 toward customers’ early termination fees or installment bill balances in an offer that will officially launch on Friday.

Sprint CEO Marcelo Claure called it “the best value in wireless” in the company’s announcement. “It’s as simple as this: Bring Sprint your Verizon or AT&T bill along with your phone and we’ll cut your rate plan in half. That’s a 50 percent savings on your rate plan every month. And this great deal is not just a promotion. This will be the customer’s ongoing price,” Claure said in a statement.

The limited-time offer is a sign that Sprint, the nation’s third-largest mobile carrier, now sees price competition as the best way to battle AT&T and Verizon. Earlier this year, Sprint and its parent company — Japan’s SoftBank — backed off a $32 billion planto purchase smaller carrier T-Mobile US after the two sides failed to reach a deal that could have created a larger mobile company better suited to take on AT&T and Verizon.

Interestingly, Sprint’s new rate offer does not extend to T-Mobile customers.

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