Who is the lawsuit against? The lawsuit is against Cingular Wireless Corporation, a national cell phone company, and AT&T Corporation and AT&T Wireless Services, a cell phone system that Cingular acquired in a $41 billion deal in October, 2004.
Prior to the acquisition, AT&T Wireless was the second largest provider of wireless communications services in the United States based on revenues. AT&T Wireless had 22 million customers as of December 31, 2003, and reported $16.7 billion in revenues for 2003.
Before it bought AT&T, Cingular was the second largest provider of wireless communications services in the United States measured by the number of subscribers. Cingular had 24 million customers as of December 31, 2003, and reported $15.5 billion in revenues for 2003.
What does the lawsuit say? The lawsuit alleges that:
1. Prior to the merger, Cingular promised that AT&T Wireless customers would "continue to enjoy the benefits of their current phones, rate plans and features, without any service interruption" and "it's only going to get better from here'." Cingular's chief marketing executive said, 'The most tangible example of how Cingular is 'Raising the Bar' is the newly combined network — the largest digital voice and data network in the United States."
2. After the merger, Cingular implemented a deliberate scheme to dismantle the AT&T Wireless network in order to degrade the service provided to AT&T Wireless customers and induce them to "transfer" to the Cingular network. Cingular effectively ceased maintaining the AT&T Wireless network facilities, as was noted in trade publications.
3. AT&T Wireless customers have complained of increasing dropped calls, and poor or no reception.
4. Dissatisfied AT&T Wireless customers are given the option to "upgrade" to Cingular by (a) paying an $18 "transfer fee" or "upgrade fee" to Cingular, (b) purchasing new handsets from Cingular, (c) entering into new service contracts with Cingular that are often less favorable to the customer than the customer's existing contract with AT&T Wireless, and (d) charging the customer an additional $18 for the SIM chip which enables the handset to operate.
5. AT&T customers who do not agree to such an "upgrade" are left with the choice of fulfilling their contract term with AT&T despite degraded or non-existent service, or paying an early termination fee of $175 to cancel service before the expiration of the 12- or 24-month contract term.
The lawsuit charges that Cingular engaged in false advertising, breached the contracts with AT&T customers, and violated the consumer protection laws of each of the fifty states.
What is the purpose of the lawsuit? The purpose of the lawsuit is to stop Cingular from continuing its practices; force Cingular to repay, with interest, the amounts that its customers had to pay as a result of Cingular's misconduct, including the "early termination fees," any "upgrade" or 'transfer' fees, and punitive damages; and require Cingular to engage in "corrective advertising."
When and where was the lawsuit filed? The lawsuit was filed on July 6, in U.S. District Court in Seattle, Washington.
Who is covered by the lawsuit? The lawsuit is a nationwide class action suit that covers all AT&T Wireless customers who were customers as of October 26, 2004.
Who brought the lawsuit? The lawsuit is based on an investigation of numerous complaints received by the non-profit Foundation for Taxpayer and Consumer Rights (FTCR), a California-based crusader for consumer rights. FTCR has filed several suits against a number of cell phone companies for billing abuses, poor service, "early termination fees," and the practice of disabling or "locking" cell phones so that a consumer cannot use existing phone when moving to a new company. FTCR is on the web at: www.consumerwatchdog.org.
Also representing the consumer plaintiffs is the law firm of Cotchett, Pitre, Simon and McCarthy, of Burlingame, California. The firm is on the web at: www.cpsmlaw.com.
Stritmatter, Kessler, Whelan, Withey and Coluccio, based in Seattle, is also representing consumers who were harmed by Cingular/AT&T's deceptive practices. The firm is on the web at: www.SKWWC.com.
What happens next? Typically, cell phone companies seek to get the cases dismissed on the grounds that their customers have signed an "arbitration agreement" barring their right to go to court. However, lawyers in the case believe that these arbitration agreements are unfair and cannot be enforced.
Where can I get a copy of the lawsuit? Download a copy here.
Who do I contact for more information? Those who would like to follow the progress of the case may sign up for FTCR's "legal updates" at: www.consumerwatchdog.org. Consumers with cell phone or other complaints may email to: [email protected]
