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Mar. 19, 2007

Wishing to end lenghty and costly legal litigation over specific penalties, Cingular has agreed to pay $18.5 million to compensate subscribers in California who were charged when they canceled their contracts before their expiry.

Reportedly, about 115,000 former subscribers will get refund checks of $160 to reimburse them for the excessive fees previously charged.

The Cingular suit covers a period between Jan. 2000 through Apr. 2002, during which a surge in new subscribers to the company’s wireless services in California overloaded its systems.

Tens of thousands of new customers were unable to place or receive phone calls, and often experienced dropped calls once connected.

Many subscribers chose to end their contracts early in frustration, only to be charged with early termination fees.

The CPUC (California Public Utilities Commission) berated Cingular for failing to give its subscribers an adequate period in which to change their minds and cancel their service.

AT&T's wireless division said in a statement "Cingular's business practices have changed significantly since the period in question, and Cingular is now the industry leader in customer-friendly initiatives.”

The company now offers customers up to 30 days to return their phones and drop their service without any penalty.

Cingular spokesperson Lauren Garner said that the company expects to issue the refunds within 60 days.

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Source: Wireless Week