Oct. 10, 2008 at 9:00 AM ET
AT&T reserves the right to change its terms of service by sending its Internet service customers an e-mail. Apparently, it also reserves the right to deposit those e-mails into its customers’ junk mail folders.
Last month, AT&T made some controversial changes to its Internet policies. Verbiage indicating that high-bandwidth users might experience some intentional slowdowns irritated some techies; another section that forces customers to use binding arbitration to resolve disputes annoyed consumer organizations; and an L.A. Times reporter bristled at the size of the full new agreement -- 2,500 pages.
But Lance Mead, an AT&T Internet customer from Encino, Calif., almost missed the entire controversy. His notification of the new terms of service was sent via e-mail on Sept. 18, but AT&T's own spam filters trapped the e-mail as spam and deposited it in his junk mail folder, he said. On a whim, he checked the folder and spotted the notice. He was furious.
"AT&T wants to enforce the change in service that they prevented their customers from reading," he said. "I have called AT&T and they act as if this is the normal and proper procedure."
AT&T spokeswoman Susan Bean said company engineers talked with Mead after msnbc.com inquired about his case and determined that the terms of service e-mail "inadvertently" ended up in his junk e-mail folder.
"We apologized for any error on our end," Bean said, adding that the message was deposited in the junk folder "perhaps by something he inadvertently did or by a filter error."
She added that the e-mail was successfully delivered to millions of other customers and the firm has received no other complaints.
"There is no evidence that this happened to anyone else, but we're continuing to look into it to make sure," she said. "This is the same way we send out all of our promotional offers and other customer communications, so we know that people routinely get these communications.”
Of course, it's possible other customers never checked their junk folder on Sept. 18 or, worse yet, have it set to automatically delete spam.
Burden is on customer
Still, on AT&T's Web site, the burden is placed squarely on the consumer to spot and read such e-mails. Failure to read them will be interpreted as consent to the new contract terms. The firm even reserves the right to announce price increases by e-mail.
"From time to time, we may change this agreement, the site, or service, including the rates and charges," AT&T's legal policy states. "It is your responsibility to check your e-mail address for any such notices. Your continued subscription to the service after receipt of such notice constitutes your acceptance of such changes."
Consumer attorney Paul Bland, who often litigates cases contesting binding arbitration clauses like the one that arrived in Mead's e-mail, said courts generally hold that a single e-mail notice can indeed create a binding contract.
"It's a lousy way to send it out, but unfortunately the vast majority of courts have held that this kind of notice is enough to create a binding contract," he said. "I think that courts are stuck in this 19th century vision of contracts being something that are formed when two sophisticated people sit down at a table and haggle out terms, and the transfer of standard form rules by e-mails, in settings where no one will read them, highlights ... the need for a new paradigm of contract law."
Bland said AT&T’s notice was an extreme case, however, and a court might be convinced to rule that a contract had not been formed if "the corporation itself did something that caused the e-mail not to go through."
Strong language from the bench
Of course, that would require someone like Mead to hire someone like Bland to contest the clause.
Earlier this year, Bland argued successfully before the Washington State Supreme Court that an AT&T consumer contract with a binding arbitration clause was "unconscionable" because it attempted to void consumers’ right to file class-action lawsuits. In that case, Michael McKee, an AT&T long-distance customer living in rural eastern Washington, found he was repeatedly charged a city utility fee even though he lived outside city limits. The charges were less than $2 each month, but McKee and Bland argued that the small charges would add up to a substantial amount if all rural Washington customers could join the case. AT&T tried to force McKee’s case to binding arbitration.
In affirming a lower court decision to void the arbitration clause, the Washington State Supreme Court used strong language.
"Courts will not be easily deceived by attempts to unilaterally strip away consumer protections and remedies by efforts to cloak the waiver of important rights under an arbitration clause," it said in the ruling.
The case was important, Bland said, because few individual consumers will file a case over $2 fees, and certainly no lawyer would take on such a case. The only recourse available in such a case is to bundle thousands of small cases together into a class action, he said.
"What normal consumer would read their phone bill and notice the tax, be suspicious that AT&T might be charging a tax that's not owed, then do the research to figure out whether it was really owed or not?" he said. "The case is either a class action -- in which case AT&T would be forced to stop chiseling people and give the money back -- or it's nothing at all. "
Which suggests another important question: What normal consumer would look in the junk mail folder for a new contract from AT&T? Fortunately for the rest of us, people like Lance Mead and Michael McKee do just that. Their stories offer a reminder that it's important to read all the mail, and all the fine print, that comes from any companies you do business with. And apparently, it's important to read all your junk mail, too.