Court Rules Compensation for Former Cingular Wireless Customers

A US court has ruled that some 7,000 Cingular Wireless customers in Wisconsin are entitled to refunds from a debt collection agency after it added "illegal fees" to the debts. The collection firm, Afni Inc - a subsidiary of Arrow Financial, added fees equivalent to 15% of the outstanding debts.

The 7th Circuit Court of Appeals said that fee was not allowed under Wisconsin law or their cell phone contracts and violated the Fair Debt Collection Practices Act.

The court upheld an earlier ruling which will require the distribution of $206,000 in damages, costs and attorneys fees to the customers. The procedure for compensating the customers has not been approved yet.

Wisconsin law does allow 3rd party debt collectors to apply service charges to the debt, but in this situation Afni had brought the debt from Cingular Wireless and could no longer be considered a 3rd party collector.

Posted to the site on 9th December 2008