Class Action: Cell users pursue claims;

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Former customers of AT&T Wireless say service quality fell after the Cingular merger.

Tulsa World (Oklahoma)

Frustrated by dropped calls and deteriorating cell phone service, former customers of AT&T Wireless in nine states have filed a class- action lawsuit against Cingular Wireless and AT&T Wireless, which merged in a $41 billion deal in October 2004.

In the lawsuit, which was filed in July in U.S. District Court in Seattle, the plaintiffs allege that after Cingular‘s acquisition of AT&T Wireless, Cingular schemed to dismantle the AT&T Wireless network and degrade its services.

Cingular did so in an effort to induce AT&T Wireless customers into “transferring” from their AT&T Wireless plan to a Cingular plan,” the plaintiffs allege in their complaint. “The Cingular service contracts offer less favorable terms than the customers’ previous contracts with AT&T Wireless.

Cingular also induced AT&T Wireless subscribers to purchase new Cingular handsets and caused customers to incur significant additional charges including… an $18 “transfer” or “upgrade” fee as well as an $18 fee for the SIM chip which enables the Cingular handset to operate.”

Plaintiffs in the case are seeking repayment of the fees with interest, including “early termination fees,” upgrade or transfer fees, punitive damages, a halt to the practices, attorneys fees and “corrective advertising.”

The plaintiffs are represented by Paul L. Stritmatter of Seattle.

The lead plaintiffs, who are residents of Washington state and California, allege that AT&T Wireless customers who didn’t transfer service to Cingular have experienced diminished service and dropped calls, as well as poor or no reception in areas where they previously received adequate re ception.

If consumers chose to drop AT&T Wireless services, they were required to pay an early termination fee of $175 to cancel service before the expiration of the 12- or 24-month contract, the plaintiffs allege.

Cingular, which became part of the new AT&T Inc. after SBC Communications merged with BellSouth Corp. last year, has filed motions with the court to compel arbitration of the disputes and to dismiss the lawsuit.

The new AT&T issued a writ ten statement on the lawsuit earlier this week.

“This lawsuit is completely without merit,” AT&T said. “Cingular, now part of the new AT&T, has invested more than $13.5 billion in integrating and enhancing its networks in the almost 2 1/2 years since the merger was completed, leading to a significantly improved customer experience and the fewest dropped calls of
any national carrier.”

In its motion to dismiss, AT&T/Cingular said every wireless service agreement since July 1999 included an arbitration provision among its terms and conditions. AT&T/Cingular is represented by William Cronin, a Seattle lawyer.

“Although the exact wording of these provisions has changed somewhat over time, each has required customers to pursue their disputes with Cingular or AT&T Wireless in either individual arbitration or small claims court,” the defendants allege in their motion.

Cingular‘s arbitration provisions do not contain a prohibitive cost structure or otherwise impose disincentives on customers’ ability to pursue their claims… Accordingly, this court should issue an order compelling each plaintiff to pursue his or her claims in individual arbitration or in small claims court and dismissing this lawsuit.”

Harvey Rosenfield, who is co-counsel for the plaintiffs and founder of the Los Angles-based Foundation for Taxpayer and Consumer Rights, said the wireless phone contracts are representative of a range of contracts that limit consumers’ rights.

“We have received an enormous amount of complaints from members of the public,” Rosenfield said in a telephone interview. “According to Cingular, the lawsuit should be thrown out be cause every AT&T customer who moved to Cingular agreed to have every dispute handled by arbitration. According to Cingular, they forfeited their right to a lawsuit.”

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