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85-year-old man learns he needn't lease his phone
[July 28, 2007]

85-year-old man learns he needn't lease his phone

(Bangor Daily News (Maine) (KRT) Via Thomson Dialog NewsEdge) Jul. 28--HERMON, Maine -- Lloyd Overlock never had much reason to think about his telephone. The 85-year-old Hermon resident just paid his bills and knew the service was there if he needed it.

But Overlock, who for five decades has been paying a monthly fee to lease his phone, found out recently that the arrangement is a pricey, outmoded throwback to the days of telephone industry monopoly.

"I don't use it much; I just sit here and wait for it to ring," he said Friday during a visit at the cozy home he built himself and moved into back in 1952. That's the same year he got his telephone, a heavy, dark-gold contraption the size of a child's shoebox, with a solid-feeling finger dial. It hung on his kitchen wall all those years -- until last week, when his niece Roberta York was making one of her frequent visits from her home in Millinocket.

York said she peeked at a bill from AT&T lying on the kitchen table. As is the case with most area residents, she said, her uncle's phone service is provided by Verizon, so she was curious.

"I said, 'Uncle, what's this?' And he said, 'That's for my telephone.' That's when I realized he was still leasing his phone from AT&T," she said. "He got that phone in 1952, and he's paying $4.42 a month for it, every month."

Right away, she said, she picked up the gold receiver and dialed the customer service number on the bill to cancel the service. The friendly operator on the other end attempted to dissuade her, offering her uncle a 20 percent discount off his monthly rental fee and reminding York of the benefits of leasing.

"She said that if something goes wrong with that phone, they'd have a new one here the next business day," she recalled. "I was thinking to myself, 'If something goes wrong with that phone, I'll go to Wal-Mart and get one the next day.' But I didn't say it." She just told the representative to cancel the lease, and then she drove to a local dollar-discount store and bought her Uncle Lloyd a new wall phone for $7. It plugged right in to the old connection and worked like a charm.

York said it troubles her that elderly people like her uncle get taken advantage of. The monthly lease doesn't seem like a lot of money, she said, but it adds up.

"For some people, that four dollars could mean a gallon of milk or a prescription or something to eat," she said.

Wayne Jortner, an attorney with the Maine Public Advocate's Office, said Friday that Overlock's situation is not unique. Before 1984, when a federal court determined that AT&T's lock on the nation's telephone industry constituted an illegal monopoly, most consumers were required to lease their phones, he said. The forced restructuring of the industry included opening up the manufacturing of telephones, and people began purchasing their own instruments.

Now, leasing is rare. Most people who still lease are elderly, according to Jortner, and they keep making the monthly payments because they don't realize they have an alternative or perceive that alternative as being too complicated.

They also may be paying much higher rates for phone service than they need to, as well as paying additional service charges and fees that could be eliminated by choosing a different service plan.

Jortner said a national settlement in 2003 against AT&T based on its leasing program awarded $80 per phone to thousands of consumers who had leased a telephone between 1984 and 1990.

The lease program is not illegal, he said, but consumer advocates faulted the company for some of its practices.

"The bottom line is, it's totally ridiculous to lease a phone when you can buy a better one for much less money," Jortner said.

Attempts on Friday afternoon to reach AT&T's corporate headquarters in San Antonio were unsuccessful. A call to the company's leasing service headquarters in Florida resulted in several minutes of listening to a recorded on-hold message explaining the advantages of leasing a telephone. These included the next-day replacement service cited by York, as well as assurances that a leased phone will have "a real bell ringer" and be hearing aid-compatible. In addition, said the recording, "You can be assured that your lease supports jobs right here in the good old U.S. of A!" There is also a "lease rewards card" that offers discounts on prescriptions and hearing aids.

Faye, the customer service representative who eventually picked up, said "hundreds of thousands of people" prefer to lease a phone, although the actual number was not available. Charges vary depending on the telephone model and some other options, but the basic cost of a rotary-dial phone like Overlook's gold-tone antique is $4.45 a month, she said. Customers are free to cancel their lease at any time, and instructions for doing so are printed on each month's bill, she said.

On Friday, Overlock's old telephone sat like a dull gold cinderblock on the coffee table, its heavy plastic casing battered and the receiver grimy from decades of use. York examined a prepaid white Mylar envelope that had arrived from AT&T a few days earlier with instructions to mail the phone to Fort Worth, Texas, in order to complete the cancellation of the lease.

"We have five weeks to send it back, or they'll start billing him again with all the back charges," she said.

According to Jortner, the mail-back requirement is nothing but "a hurdle to customers trying to get the lease charge off their bills." The phone itself is essentially without value, he said, but many senior citizens will forget to put the package in the mail, or be unable to get to the post office, or not understand that the envelope is prepaid.

Not a chance, said York. "They're pushing against the wrong person," she said.

Overlock, meanwhile, said he likes his new phone, a sleek, silver touch-tone model that fills only a fraction of the space left by its predecessor. He never has tried making a call using push-buttons instead of a rotary dial, but figures he can get used to it.

He brightened when a test call from a nearby cell phone filled his small home with the new phone's shrill ring -- the first time he had heard it.

"Now, that's quite a phone," he said with a smile.

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