AT&T Next is a poorly devised scam

July 16, 2013

    AT&T Next is a scam

    AT&T’s Next actually makes us laugh out loud. Heartily.

    For all the consternation about paying full price for a phone, this new AT&T Next thing is a head scratcher. Rather than pay full price for a phone, AT&T is asking you to pay in installments, then a premium for the option to give the device back if you want to bail out early.

    The gut reaction is that this is a great option for those of us who want a new device every few months, almost like a rental plan. Sure, we’d pay a premium to be able to exit a plan early. We’d be on the bleeding edge, all the time.

    Rather than offering something fair, they're preying on our impatience as consumers.

    No. AT&T’s plan only kicks in after 12 months, so you can’t turn the device in after 6, or even 10 months. You pay for the device in installments, in addition to the Next scam, and you still wait a year before you can turn the phone back in.

    Let’s break it down: If you paid full price for the Samsung Galaxy S4 ($640), you’d have that cost amortized over 20 months ($32/month). On top of that extra $32/month, you’ll pay a subsidy for the Next program, which is currently unknown. The common thinking is right around $20/month, so we’ll go with that.

    Over the course of 12 months, which is the earliest you can opt-out of this plan, you’ll have spent $624 for the device. At that point, you still don’t own the device. After 12 months, you will have paid AT&T nearly the exact cost of the device, and it’s still not yours.

    If you keep that device for the full 20 months, you will spend over $1,000 on a $640 phone.

    If you keep that device for the full 20 months, you will spend over $1,000 on a $640 phone. I don’t know if you know this, but cell phones don’t appreciate in value. Rather than biting the bullet and paying for the device upfront, you will have gone and paid AT&T a lot of money for the pleasure of using their device for 12-20 months.

    This is another instance in a long line of carriers’ acting as though mobile devices are theirs to dole out at their whim, on their terms. Rather than offering something fair, they’re preying on our impatience as consumers. While Next solves the problem of ending your contract earlier than planned free of penalty, it does not save you money or even wink at being fair for consumers.

    I believe the proper term for describing Next is ‘bamboozled’.

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    • Jerome

      I can’t think of a single good att deal. They are always scanner scumbags.

    • Travis

      I work for att and all you will pay is the out right price of the phone divided by 20 months per month with no additional fees unless the phone was damaged, now once you trade in your phone from 12-19 monthes all future payment are forgivin and you start the new financing with the new device, WITH NO DOWN PAYMENT BUT TAXES. So please get the facts straight before you call a companys program a scam.

      • Nick Schiwy

        The point is that you pay a monthly fee to finance the phone and then the phone plan has a built in subsidy for a phone so if you opt-in to the “Next” program then you shouldn’t have to pay as much for your monthly service. The doubling up of fees to pay for the phone is why everyone is calling it a scam, and for all intensive purposes, it is. Nobody that likes their money should opt-in to this new program. It would literally be $400 cheaper for most devices to just buy the phone outright.

        • Travis

          I do agree with the price should be dropped in some way because your buying the phone out right but I wouldn’t call it a scam, its an alternative to cross upgrading .

          • Nick Schiwy

            As a rule, the subsidy should discontinue after the cost of the phone has been covered. I do see what you’re saying though because at least it’s giving people an opportunity to buy a new phone and not have to front the $650 all at once.

        • Kat

          There is no monthly subsidy fee to finance the phone.

      • G Lee

        noooo they are right … u just said the same thing they explained up above… u pay more money and u still have to wait to get another phone…

        • Travis

          I’m just saying scam is a strong word to say about a company doing the same thing other companies are doing. T-Mobile is lower prices starting out because of coverage but Verizon is not lowering you bill either. Maybe saying device financing is a scam would be more appropriate.

          • G Lee

            ya i get you…. how about att push out there updates FOR THE PHONES…before trying to get you to upgrade your phone. NEW phone & no software updates is my problem with att…… The kill phones when it comes to updates… look at the S3 (

            • Travis

              If the international phone has 4.2.2 then you would have a case because those software updates are sent out as soon as they are available for international customers but that is samsung fault because they are worried about the newest phone. Again every american carrier has a delay with software updates and not just att. Given sprint seems to be the fastest.

            • G Lee

              no tmoblie .. sprint and roger and other carriers have 4.1.2 or 4.2…. since DEC 19,12… ATT has been on 4.1.1 since i brought the phone … so ATT and samsung are both at fault .. but mosty att is to blame being the number one carrier

            • Travis

              Why would att hold back an update? Carriers don’t care if you get the update our not, they just have to test the updates.

      • SamsaraGuru

        It is nice to see someone stick up for the truth and you are to be commended for it Travis. But really, a rose is a rose by any other name and a contract is a contract whether you do include an option to bail out down the line. I used to sell cell phones myself and would never allow myself – knowing what I know – to ever go with a contract carrier. It is pure foolishness and so unnecessary – if your goal is real value and the freedom to keep yourself free to pursue competitive pricing.

        But to each his own and if the Next plan makes some people happy – more power to it and to you!

        • Travis

          I don’t want to miss lead anyone, I will not be using this plan because I think the option is too expensive like having an additional line as an upgrade line is. I know what you mean about the contract but I know ever in and out of the company to worry about it.

      • AndroidShiz

        You know what is a scam? signing a 2 year contract and after that contract is over still paying the same amount per month. That’s a complete scam in every way. Why don’t you explain that? You can’t. You have to chalk it up to complete greed just like your shared data plans are complete scam. Every overpriced scam, or “deal” that AT&T or Verizon offers only works in their favor. The customer gets the sandy, dipped in glue and glass, unlubricated shaft every single time.

        • Travis

          I still don’t understand how Verizon and att are scam company’s. They are the biggest network company’s so they have charge the most, if you don’t like it you have other options but I know just like a lot of other people I want my signal even if I’m not in a city or by a major highway. Again I’m not defending any company, they are all evil in there own way. Verizon forces you to change your plan or buy the phone outright but big LTE network. T-Mobile has crappy coverage outside of cities but really good deals. Sprint slow network and better signal then T-Mobile but just about the same price of Verizon and att. Att is expensive but has good 3g 4g LTE network.

        • Mark Washington

          That absolutely makes no sense what you said… Company pays full price for the phone plus whatever to carry that device on there network for some devices (Apple) so in order to get something in return they need a guaranteed commitment… And this has nothing to do with the price of there plans. It’s all about commitment to the Company!

          • CoolCustomer

            Well your phone bill (under a normal 2-year contract plus subsidy phone) includes a small amount every month so that at the end of 2-years ATT/Verizon/Sprint would have lost $0-$5 dollars off the cost of phone. What makes it shady is that they don’t tell you this. Tmobile has gone ahead and de-coupled the service from the phone and is why you see cheaper plans. What elevates “Next” from terrible-plan to scam is the fact that the payments you are making are towards the actual cost of the phone (like on tmo) but they aren’t removing the part of your bill that is there to help pay for a subsidized phone.

      • Chris

        It is not 20 a month

      • Mr_Vault

        And don’t forget Travis, a brand new 2 year contract. That is what ATT wants out of you. If you want to get out of that wonderfule NEXT program, you’ll pay all those little hidden extras, ETF, remaining cost of phone, etc. At least on Tmo, if you decide to leave, you simply have to pay the phone off and its all over. No ETFs. No contract. No scams. No legal-eze wording. Contracts bad. And we still don’t know what this wonderful cost is going to cost monthly. Either way, rest assured, ATT has THEIR interests at heart, not yours.

    • Paul Allen

      It seems to me that some of the need for these new early exchange programs could have been avoided had the carriers not gotten rid of their 1-year contract options. And how about we address the elephant in the room and ask why retailers and carriers are so determined to con us out of our old hardware? If my 1-year-old phone is of so little value, why do they want it so bad? Finally, I’d assume that if I’m going to be paying for my phone in monthly installments, it wouldn’t be unreasonable to expect my monthly bill for voice/SMS/data to be reduced?

      • Mr_Vault

        You missed the point. They aren’t “con”-ing you out of your old hardware. They want your $$. They do not want “so bad” your old phone. They want your $$. What ATT is doing is finding anyway possible to keep you locked to them with a contract. Scam? Call it want you want but its a crummy plan that anyone with sense can see through. I was with ATT years ago and never again. Worst ever. I do however love some of their phones. Popped into the local ATT store a month ago, bought the LG Optimus G Pro outright ($550 + tax), unlocked and now using it on Tmo. I’ve got the phone I want on the plan I want and no contract. I can upgrade every week if I want to. Do NOT get locked into a contract if at all possible.

        • Paul Allen

          I’ve been using cell phones and pagers for close to 20 years and I’ve never seen so many people put so much effort into trying to get your old hardware. Used to be, carriers didn’t give two turtle s&#@s about your old hardware, now everyone from department stores to charity groups are trying to talk your out of your old devices. Yes, AT&T’s biggest priority is getting you in a contract but they could do that without offering to give you pennies on the dollar for your old phone. Let’s call Next what it is: a rate increase.

    • Charles Chambers

      The downside of this plan is that you sink $384 a year into a phone, and give it back to AT&T. It seems great for them to keep you locked into their network. If you want to get out of your contract, you now owe the contract price plus the remaining balance on your phone.

    • SamsaraGuru

      Jeez – why not just buy an unlocked phone and take it wither thou wilt? Why let yourself get roped into any kind of contract? This is just a half hearted attempt by AT&T to try to deal with the Un-Contract concept of T-Mobile and still keep you locked into their system.

      • End in sight

        Agreed. Most people would be so much happier without a contract, but they don’t know enough to try it.

        BUT, if you buy an unlocked phone, most likely it will be GSM so you’ve got ATT and Tmo to work with. (I use Tmo.)

        • Travis

          I would love to have an unlocked note 2 over an att note 2 but it’s just too expensive.

          • End in sight

            Three years ago I did an ROI analysis and found that there was a break-even point for me. For example, if I expected to keep the phone for more than one year, it was cheaper in the long run to buy it outright, but if I planned to buy yet another new phone within 14 months year of this one, it was cheaper to get a subsidized plan.

            Still, it sux to have to shell out so much cash up front OR slap down the credit card.

    • AndroidShiz

      Just like when they want to offer share data family plans that’re such a ripoff when you really break it down. Preditorial carriers like ATT and Verizon are about offering you less for more money and preying on the confused by using snake oil verbiage. But the best part is they explain it to you like they’re selling you gold for the price of copper. It’s bad enough when you sign a 2 year contract with a new phone, and after 2 years you still pay the same amount of money per month regardless. That’s the biggest scam if ever there was one. It’s things like that -that need to have petitions/legislation that make it illegal to do things like that. But of course to get around it- they would just raise the price and lower it to what we’re paying now anyways after the device was paid off.

    • Marlene Hullett

      You work for at&t so of course you’re going to speak on their behalf. It’s a scam you know it . at&t don’t give a blank about their consumers It’s about the $. Of course they make it look like a gift but it’s just another plot to rip you off. Don’t fall for it!!!!!!!!

      • Travis

        You know the great thing is no one is forcing you to go onto this plan but yet everyone is saying it’s a scam. Trust me I don’t side with any company, I’m just simply stating that every company is doing it yet let’s call it a scam when att does it. Lets do the math if you wanted to add a line that 10 a month htc one is 200 upgrade fee is 36 for 2 years that’s 476 but then your other line you upgrade that’s on average 200 phone at the one year mark with upgrade fee of 36 that’s 712 dollars over 2 years to have 2 upgrades. Now HTC one is 600 out right divided by 20 is 30 a month so after 12 you pay 360 times 2 years is 720 dollars. Wow they made 8 dollars on there so called scam. Like I agreed to earlier yes att should lower the bill if your not in contract but the nice thing about this is its your option and not forced on you.

        • needa

          its the charge for the program that makes it a scam. if there is no charge, there is no scam. but if they do charge you.. well id say you would have to be an idiot, or have more money than needed, to use the program.

          • Travis

            Best way to compare this plan is like getting a lease car. Lease a car is not financially a good idea but for the people that want to dump there car after a year or 2, this is for those people that just don’t care and want to dump there phone and a guarantee for a new phone. If you want to buy your car and sell it your self and take a chance at the resale value then this is not your option then. Since when has leasing something been a scam?

            • needa

              cept by the time you get done with the lease… you have not purchased the car. that is of course.. if there is a charge to use the next service. car dealers also give a cheaper note on the car if you lease it. which is something that is not being done through att. the reason the payment is cheaper is because they know they are getting the car back and will be able to sell it to get the rest of their money. att is just going to send it off to a refurb shop and re-certify it to stick someone else with a two year contract. in other words… this is nothing like leasing a car.

            • Travis

              Att is giving the phone to you to use for a year and charge you a lease on it and after the 12 months you have the choice the buy it or trade in for a new phone the only difference is att is charging for a service and the cars aren’t which has nothing to do with what I’m talking about.

            • needa

              you are just falling further into a hole with this one bud. it shows that you lost the argument and are unwilling to come to terms.

            • Travis

              lol

            • CoolCustomer

              The problem with that analogy is that when I lease a car I also don’t have to pay a monthly fee for the right to drive it.

              Furthermore, they aren’t leasing you a phone because if you pay for the full 20-months its yours. The Next plan is more akin to financing a car and then trading it in before you’re finished paying it off with the added insult of having them charge you the same monthly fee as a person who has a subsidized phone when we all know that the cost of the service includes a small portion to pay off the subsidized device.

    • Mark Washington

      My point exactly! All of the plans work you. T- Mobile including contract with my Sprint locked into 2 years for a phone is best way to go! If you want a new device then sell yours and pay the difference.

    • brendan soliwoda

      isn’t this the same thing as VZ edge? It just seems like the author is taking a swing at AT&T without doing the same for Verizon.

      • Travis

        Exactly device financing is just stupid all around. Why just yell at att?

      • needa

        verizon is not charging you $20 a month for the service on top of the monthly charge for the phone. the thinking on this blog is at&t is charging you.

        • Travis

          Verizon is charging you a 2 dollar interest and cramming the payments into 12 months for the out right price. I have not heard anything about them dropping the price of there plan. Please provide proof if that’s the case, I can’t find anything on it.

          • needa

            verizon lets you upgrade the moment your device is 50% paid off. they are not forcing you to wait an entire year and they are not adding in a monthly fee to do so. what is so hard for you to understand? why do you feel the need in arguing with and correcting me when there is nothing to argue or correct?

            • Travis

              I’m not correcting you, I’m asking for a source and yes Verizon is adding a financing fee of 2 dollars. Why do you seem so defensive?

            • needa

              that $2 fee has nothing to do with the upgrade program. and everything to do with the payment plan.

            • Drizzle

              Travis, let it go, AT&T sucks. We know this… lol

            • Travis

              Lol every carrier sucks bro

        • brendan soliwoda

          You don’t know that AT&T is charging $20 a month, the author is just assuming it.

    • MJ45

      Glad you had the balls to call these crooks what they truly are scammers. The problem is there are too many suckers out there.

    • Kuladoz

      If you go to any store, if you buy something and pay monthly, it will always cost more at the end than paying for it in one shoot, it’s the same here.

      • titan

        Yeah, ok. Not with T-Mobile.

    • John-Phillip Saayman

      Yep it’s just not fair

    • Ørjan Baglo

      Here in Norway we either have one year contracts or we just pay for the device upfront. I think the US is so diffrent from the rest of the world when it comes to this its just strange. They are living in a buble and like all bubles it will burst. The problem isnt just the carriers though its the customers who dont want to go back to paying full price for a phone.

    • AndroidBrian

      Just as horrible as T-Mobiles stupid new plan. I still hate you t-mobile.At least ATT didn’t screw over all there grandfathered plans.

      • http://www.androidheadlines.com/ Alexander Maxham

        throttling grandfathered unlimited data customers at 3GB or 5GB isn’t screwing them over?

        • AndroidBrian

          T-Mobile does the same thing.

          • http://www.androidheadlines.com/ Alexander Maxham

            No they don’t. I have unlimited and use over 20GB per month and never been throttled.

      • CoolCustomer

        Tmobile’s plan is nowhere near the broken mess “Next” is. Jump is effectively a $20 – $30 (depending on the device) add-on to your bill. With this you get insurance for your phone that covers everything, including water damage, and offers a replacement with a max deductible of $150 (this has a 6-month timer additional replacemnets cost more). If your phone isn’t damaged after 6 months they give you any new phone you want and you continue to pay the Jump fee of $20 – $30. All that plus the fact that Tmobile has removed the phone subsidy charge from their service plan (resulting in cheaper plans) and you get a fresh device every 6-months, the best carrier insurance, and unlimited talk, text and 4g(no slow downs) for $100.

        • AndroidBrian

          There is one reason why Next isn’t a big deal. You don’t have to sign up for it. I have a insanely cheap grandfathered plan w/ T-Mobile. Now when I want to upgrade, I can’t buy phones through T-Mobile anymore. Have to buy them thought 3rd party. Now all of a sudden if your upgrading your phone, T-Mobile is by far the most expensive. GS4 and HTC One for example are $100 more than every oyher carrier. T-Mobile pretty much said “fuck all of our old customers” Next is just a option for AT&T customers.

          • CoolCustomer

            1) Upgrades, with the exception of current Tmobile plans, always requires renewing/signing a contract. If your contract isn’t offered anymore you can’t upgrade till you sign a new one ask any Verizon user that still has unlimited data

            2) You do realize that a subsidized phone is paid for through your monthly bill right? The payments are coupled with the service fee. Tmobile on the other had has de-coupled them so your service is cheaper if you bring your own device.

            3) Neither 1 or 2 invalidate your concern of course but not being able to upgrade has always been an issue if your current contract is no longer offered and you don’t want to sign a new one, this isn’t a specific Tmobile problem.

            • AndroidBrian

              Of course upgrades require a 18-24 month commitment. But what you said is inaccurate. One can keep his older plan that doesn’t exist anymore and upgrade. I’ve had My Fav for years and I always upgrade as soon as my 18 months are up on all 3 of my lines.

              Subsidized pricing isn’t paid through a service fee…. Its simply paid through a more expensive plan. Month to month plans have always existed and they’ve always been cheaper but they suck because when you want a new phone you have to drop $400-750 on a phone.

              I’m pissed because my plan is so old and cheap, if I was to switch to there new current plans I’ll be paying aittle less a month (around 3-5 bucks more) and I wonot get a upgrade at my @ 18 month period.

              I can still upgrade with T-Mobile when my upgrade date comes and keep my current none existing plan. Thing that sucks is T-Mobile phones are all marked up now. & Tmobile.com doesn’t sell phones anymore to customers with old plans. They force people to buy them at other stores like Costco, Best Buy, Wal-Mart.

    • Trent Richards

      AT&T definitely scammed me and they won’t ever get the opportunity again. Years back at the start of the 2008 recession in the US, my wife and I decided to look into one of the cheaper carriers, Metro PCS. We had been with AT&T for almost a decade and we honestly had no clue where our contract was up(it becomes quite difficult to keep up with after multiple updates over the years). I called AT&T to ask when our contract expired and the guy I spoke with told me that our contract had expired 2 months earlier. I had him confirm that we were no longer under contract and then got off the call. We purchased our new Metro PCS phones and gave it a week to ensure everyone had our new phone numbers. I then called to cancel our AT&T service and was told that we would be charged several hundred dollars for early termination. I asked for an explanation and informed them of my call a week earlier. The call ended up escalating to a manager and since the original person I spoke with didn’t properly log the call, the manager was basically calling me a liar and said that he didn’t believe that I had even called a week ago. Fortunately I called them with their own phone and was able to have him pull up my call logs for that day and time and was able to prove that I had called and was on the call for almost 15 minutes. Despite this, the manager still refused to acknowledge that their own employee had told us we were off of contract which caused us to commit to a different carrier. In the end we had to pay AT&T Wireless several hundred in early termination fees and it is the last penny of ours that the company will ever see.

      I realize this is quite off topic and apologize for that. Hopefully this story can serve as a warning for other unsuspecting victims.

    • Glen

      I think something that wasn’t brought up in this is the actual plan you pay per month. The thing about those rate plans is that they are subsidized meaning they cost more per month but you pay less for your phone which is why they lock you into a 2 year contract because thats how they get their money back for the phone. The problem I see with this “Next” program is that, your rate plans do not change as far as I can tell. So, you pay a subsidized phone plan + monthly payments for the phone + a possible Next program charge. Paying the subsidized phone plan AND monthly payments for the phone is like paying for the phone twice! If they want to do this monthly payments thing, why not lower the price of the phone plan since you are already paying the value of the phone plus the possible Next charge?

    • Josh Richard

      You forgot that sales tax is due upon the first bill which in my state is 8.5% so that’s another $54 you’ll pay on top of the $624.

    • Ommar A

      I’m out! F you ATT CRAPPPP I’ma jump to TMOB

    • Greg

      “On top of that extra $32/month, you’ll pay a subsidy for the Next
      program, which is currently unknown. The common thinking is right around
      $20/month, so we’ll go with that”

      All your calculations are based on this assumption – which is false. Maybe re-do the math?

    • s1974x

      No, they are not preying on the impatience of their customers, they are exploiting the financial ignorance of their consumers, and I can’t find pity to dole out to these customers who are just blissfully ignorant. Companies are basically acknowledging the “Barackification” of America where everyone is grossly ignorant on finances, believes it is the responsibility of the world to look out for their best interest, and if they do get exploited the recourse needs to be the passing of a law to protect them from their own stupidity. Since I’m kinda “Old School” and can actually perform the lost art of BASIC MATH then I would never be with AT&T, but if AT&T can find enough ignorant people to make this laughable program successful then more power to them. Hell, it’s not like state governments have run out of people to sell lottery tickets to.

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