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Somebody majorly screwed them somewhere. Its going to take some time to untangle this mess. Just don't give up. Keep trying and keep escalating. Somewhere along the food chain you will actually get a person who "thinks outside the box" and will be able to fix this mess. Complaint to FCC should help as well. Also might be a good idea to call your local newspaper or TV station if you are in small enough town. They love to do the "consumer help" segments.

What ATT did is unethical and maybe illegal but good luck proving it. People should try to stand up to these morons as all these contracts are pretty one sided where consumers have pretty much 0 say in the matter.
 
No no. 2nd, 3rd, 4th or w/e the line you are, you get subsidized iphones every 20 months, period.

The problem begins with where he sat up his account. Whoever was handling the account obviously put the 2nd line in contract and took the commission.

+1

Now, what if the person that set up the account put in a contract for the 2nd line w/o offering the free/subsidized phone and after the OP's FIL left the store, took a free/subsidized phone for himself?

If this happened, AT&T wouldn't know and the account will show that a free/subsidized phone was indeed provided when the account was setup.
 
Just to add my experience, I returned from europe in 2008 with two iPhone 3g(s) bought in Italy. When I went to the AT&T store, I was told that I would not be under contract since I already had iPhones. In addition, I was told that I was not locked into the iPhone data plan and could cancel data at any time. Well, times got tough and I decided to call up AT&T to cancel the iPhone data. This is when I found out that I was, indeed, locked into two-year contracts and was unable to cancel the data plan. In my opinion, you cant listen to anything the reps tell you. I found out the hard way. Best of luck to you.
 
UPDATE:

On the second call he got a helpful AT&T person who AGREED with him and told him how to fix the problem...except the rep couldn't actually fix it himself!

Well, that's halfway there. (Why does this feel like a spy movie? I hope helpful-rep didn't get shot by an anonymous sniper after the call ended!)

The situation is, he bought the phone out-of-state when visiting family. The phone-rep told him what he needs to ask for, but said that only the district manager for that state's stores can approve the reversal of things done in his store.

The 2 things he has to get:

1) Have the 2 year contract removed from his wife's line
2) Have iPhone eligibility restored

He stressed that part 2 is a separate step that needs to be done. Just doing part 1 only makes her eligible for other AT&T phones. The phone rep thought they'd agree to do that, but he couldn't say for certain.

So this is positive, but it's not over yet. My father in law decided that calling an AT&T store in another state right before Christmas sounds like a terrible idea, so he'll be following up on this next week.

Thanks again for all your help! I told him that if the Macrumors folks said it was impossible then he should just give up. But your positive posts really helped!
 
Thinking outside the box here but you could take them to small claims court. This is a last resort but tends to really wake some people up.

Check into public utilities commission, not sure if this covers wireless but worth looking up.

Also check out consumerist, they have email lists so you can do an EECB (executive email carpet bomb) and get attention at higher levels.
 
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