The California Public Utilities Commission (CPUC) agreed to a settlement with AT&T Mobility regarding Cingular’s deceptive and unfair business practices. AT&T, which now owns Cingular, has offered to pay $18.5 million in refunds to customers in California who were faced with unreasonable early-termination fees.
The latest settlement includes an agreement to pay a $12.1 million fine that the commission imposed in 2003, bringing the total financial cost of the deal to more than $30 million. The settlement applies only to customers who terminated their service between January of 2000 and April of 2002, meaning that roughly 115,000 people are slated to receive refund checks in the next two months. Check amounts will average $160.
According to state investigators, Cingular did not allow new customers ample time to evaluate its coverage and service. During the 27-month period in question, the number of Cingular customers doubled, reaching about 3 million by the spring of 2002, forcing its system to crumble under the weight of excessive traffic. However, dissatisfied customers who opted to cancel their Cingular plans were slapped with exorbitant termination fees that sometimes exceeded $500 despite the fact that the company was well-aware of the severe congestion issue.
Until very recently, AT&T was determined to fight the regulatory ruling in court, going so far as to file an appeal with the U.S. Supreme Court, but eventually decided that a settlement was the right direction to take. To its credit, the company has conquered its traffic issues and now allows customers a 30-day trial period during which they may cancel their service without penalty.
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