Cingular Settles Californian Lawsuit

Cingular Wireless has settled a legal action and will offer refunds worth US$18.5 million to Californian residents who had paid penalties for early termination of their phone contracts where network coverage was inadequate.

The California Public Utilities Commission (PUC) approved the settlement agreement that requires Cingular Wireless (now known as AT&T Mobility) to refund early termination fees (ETFs) collected from its former customers from January 1, 2000 through April 30, 2002. The decision brings to an end lengthy litigation arising from the PUC's original decision in this case, which Cingular challenged in court.

In addition, Cingular is required to engage an independent claims administrator to review claims for refunds of additional ETFs paid by former customers to Cingular agents for which records of payment no longer exist.

"This settlement agreement demonstrates that the PUC takes its enforcement responsibility seriously," said PUC Commissioner John Bohn. "I support this settlement agreement because it will get reparations back to affected consumers expeditiously."

The PUC required these refunds and imposed this penalty after reviewing Cingular's practice of collecting ETFs from customers who cancelled service after using their cell phones because they were not satisfied with their service coverage. The PUC found that Cingular's ETF practice was fundamentally unfair to its customers who were not informed that network coverage might be less than adequate when signing a contract.

As a result of the settlement adopted today, Cingular will withdraw its petition to the U.S. Supreme court regarding this issue."

Posted to the site on 19th March 2007