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Callers Slamming Phone Companies Long-Distance Users Get Cash For Switching, Then Get Cash To Switch Back

If it’s September, Kim Pantzer must be an AT&T subscriber.

This week anyway.

The nurse at Deaconess Medical Center figures she has switched long-distance telephone companies at least 12 times since February.

Each time, she says, either AT&T Corp. or MCI Communications Corp. sent a check tempting her to come back.

Sometimes the checks - for amounts up to $150 - arrived as little as two weeks after she had switched carriers, Pantzer said.

Once, she cashed checks from both companies in one trip to the bank.

“It was a good day’s work,” she said with a laugh, estimating her take to date at more than $500.

Pantzer is not the only customer taking long-distance checks on short trips to the bank.

People throughout the Inland Northwest are the winners in a marketing war fought with checks, frequent-flier miles, even gift certificates from Nordstrom.

The stakes escalated earlier this year with passage of legislation deregulating the telecommunications industry.

The bill allows long-distance companies to offer local telephone service. Local carriers like US West Communications will be able to get into the long-distance business.

Acutely aware that customers want to buy all their phone service in one package, telephone companies are doing all they can to establish relationships that will survive the more intense marketing onslaught ahead.

“These guys are definitely trying to capture customers,” said Terrence Barnich, a Chicago-based telecommunications consultant.

He said the discounts available now are modest compared to those possible when telephone companies can lump all their services together in a single package.

The checks and other goodies offered by the industry have squeezed margins, Barnich said, but by no means are companies losing money.

“They don’t want to reduce rates, but they can finagle around with this,” complained retiree Lucile McCallum, who said she has been peppered with AT&T checks for years.

Instead of cashing them, McCallum sent them to MCI her long-distance company for six years - which credited the amounts to her phone bill.

In August, McCallum relented. She cashed a $100 AT&T check, but not without confessing a guilty feeling to the bank teller.

“She said, ‘I’ve had a man in here who had six of them,”’ McCallum said, adding, “It’s gotten crazy.”

A spokeswoman for AT&T, which reportedly mailed more than $1 billion in checks the second quarter of this year alone, agreed.

“It becomes a very expensive proposition,” said Sue Carpenter, who nonetheless said the cash is only a small part of the long-distance behemoth’s marketing expenditures.

She said about 500,000 customers switched long-distance companies last year.

“The competition is hard, fast, and it’s ongoing,” Carpenter said.

She said AT&T prefers credits for customers who stick with the company. Its True Rewards program, which awards points towards merchandise, travel or other services according to the amount of long-distance billed, was created for that purpose, she said.

At MCI, spokeswoman Kelly Seacrist acknowledged the use of cash inducements as well as a point program similar to AT&T’s.

But she said the company has tried to focus more on popular programs like its Friends and Family, which recently was enhanced with one free hour of calling each month.

One of the newest entrants into the longdistance market is also one of the largest, GTE Corp.

GTE, a $20 billion company, began offering long-distance service in March, and has already signed up 250,000 subscribers, said spokeswoman Barbara Bellinghausen.

She said the company has kept its sales pitch simple by relying mostly on discounts.

Bellinghausen said GTE does no merchandising.

“That can get quite complicated,” she said.

Sprint, too, banks on simplicity, and has earned increasing kudos for doing so.

Spokeswoman Catherine Goodson said the only checks Sprint mails go to those who stay with its Sprint Sense program for one year.

After that, they qualify for 10 percent cash back on their monthly bills.

Teddie Howey, who received a $100 check from AT&T in August, stuck with Sprint despite the temptation.

Husband Delbert is a long-haul truck driver, and the couple’s long-distance bills average more than $57 a month.

When she switched to Sprint, Howey said, she and a company representative spent an hour on the phone going over a typical bill to determine what carrier would be cheapest.

Sprint won, and despite relentless efforts by AT&T, she hasn’t switched back.

Sylvia Rosenthal, executive director for Tele-Consumer Hotline, said all consumers should follow Howey’s example.

“You have to put together a sample bill,” she said. “What’s good for one person is not necessarily good for another.”

Rosenthal said the first step for frequent long-distance users is getting on a calling plan. If not, she said, “You’re probably paying the highest rate.”

Marilyn Meehan, spokeswoman for the Washington Utilities and Transportation Commission, advised consumers to check the reputation of companies they might switch to by calling 1-800-562-6150.

But Meehan, who let a $100 AT&T check go uncashed earlier this month, said consumers who use little long-distance time might as well switch if they get an incentive.

“Go for it,” she said.

Teresa Hill did.

The longtime MCI subscriber got an $80 check from AT&T last month. The cash is far more than she spends on long-distance in a year, she said.

“I cashed the check and my children and I went to Silverwood.”

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