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Bad call: Seniors paying thousands to lease home phones

Published: Wednesday, May 2 2012 9:37 a.m. MDT

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The charges go unnoticed month after month, year after year. Hundreds of dollars each year going to lease landline telephones.

Martha Rettalick from Arizona was visiting her parents in Philadelphia when she found a bill for $21.09. In a story by KYW, a CBS affiliate in Philadelphia, Rettalick discussed the bill from QLT Consumer Lease Services for the three phones in her parents' home. "Add that up over the course of a year, that's over $250 for leasing a telephone," she said.

She estimates the charges over the years have racked up to about $6,000.

Stories like this one keep popping up every year or so. The common element to all these stories was somebody else looking at a senior's bill.

In 2004, the Associated Press wrote, "when Ma Bell broke up in 1984, Betty Jane Hunt continued leasing her telephone — and did so until just a few years ago, when a friend analyzed her phone bill and discovered the small monthly fee."

In 2005, Mark Segraves at WTOP Radio talked about a lawsuit against AT&T and Lucent Technologies over the practice. "Nearly three years after AT&T and Lucent Technologies settled a class-action suit that alleged the phone companies overcharged consumers for phone leases, only $8 million of the $350 million settlement has been paid to customers."

One of those customers was Seagrave's mother. "My mom was one of those consumers who leased her phone," he said. "For more than 20 years she paid the bill that came every three months bearing the AT&T logo. Like many senior citizens she thought it was her phone bill."

Redlig Financial Services talked about an elderly client: "She has spent thousands of dollars already to lease her telephone because it was provided by to her by the phone company many years ago." This was 2007 and AT&T had "580,000 phone-leasing customers."

The phone leasing by AT&T and Lucent is now handled by QLT, which has, according to the KYW report, more than 300,000 customers today.

Why would people pay hundreds of dollars to lease a phone they could buy at a store for around $10? People don't know they are paying it or don't know there are options. The Better Business Bureau said, "How do you know if you're leasing a phone? If your phone bill shows a charge for 'leased equipment,' you are leasing your phone(s). Some telephone lease companies send you a separate bill for lease charges. Others include lease charges as part of your monthly phone bill."

"Some folks never got around to buying their own personal telephone at any local store and are still just going ahead and paying that monthly rental along in their phone bill," Karen Chenoweth of CARIE, The Center for Advocacy for the Rights and Interests of the Elderly told KYW. "There's no incentive for the company to say, 'Hey by the way you could buy an equal or better product at your local store instead of paying me a monthly bill.'"

But, if the idea of leasing a phone for hundreds of dollars sounds better than buying one for about $5 at a thrift store, QLT is still accepting new customers. A "traditional rotary" phone with a "classic design" and a "real bell ringer" is only $4.45 a month. A similar TouchTone model is $5.95 a month. A more modern phone complete with an answering system and CallerID is $13.95 a month — a paltry $167.40.

QLT even has a "LeaseRewards Program" for people to save money on hearing aids, prescription services and other services targeted at seniors.

EMAIL: mdegroote@desnews.com TWITTER: @degroote FACEBOOK: facebook.com/madegroote

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