WASHINGTON—Class-action consumer lawsuits have been filed against Cingular Wireless L.L.C. and Verizon Wireless, litigation that comes as the mobile phone industry lobbies Congress and federal regulators for protection against such legal challenges through broader federal pre-emption.
A nationwide lawsuit filed against Cingular yesterday alleges the top U.S. cellular operator crippled service and overcharged former AT&T Wireless Services Inc. customers after Cingular acquired AT&T Wireless in October 2004.
The class action, filed in federal court in Washington, alleges that instead of the new and improved services that Cingular promised AT&T Wireless customers, Cingular immediately began dismantling and degrading the AT&T network, forcing the latter’s customers to move to Cingular’s cell network. As a result, according to plaintiffs, customers had to buy new phones, move to higher-cost plans, and, in some cases, pay an $18 transfer or upgrade fee. The suit said some customers who tried to go to another company were hit with early termination fees of $175, while others who didn’t want to or couldn’t pay the fees were forced to ride out their contract with AT&T Wireless while suffering poor to no reception.
“Cingular promised AT&T customers it would ‘raise the bar;’ instead, it lowered service quality, forced AT&T customers to move to Cingular, and then raised prices,” said Harvey Rosenfield, a lawyer for the San Diego-based Foundation of Taxpayer and Consumer Rights.
Joining FTCR in the suit are law firms in California and Washington State.
“Cingular has displayed an arrogance which sends the message that their market share is more important than their customers,” said Bruce Simon of the Cotchett, Pitre, Simon & McCarthy law firm in Los Angeles.
“AT&T promised customers the moon but delivered nothing,” said Mike Withey of Stritmatter, Kessler, Whelan, Withey and Coluccio, a law firm in Seattle. “This suit seeks to hold them accountable to their loyal customers who have been forced to pay added fees just to get the service they were promised. It’s not fair.”
“We really refute the points in the suit,” said Clay Owen, a Cingular spokesman. “In fact, we spent $6.5 billion last year integrating and upgrading our wireless networks. This isn’t about dismantling anything. This is about integrating and improving the networks of AT&T Wireless and Cingular Wireless.”
Verizon Wireless, meantime, faces a new class action suit that moved to federal court in Detroit late last month.
The suit—technically filed against parent Verizon Communications Inc. but directed at its wireless unit—alleges Verizon Wireless charged a monthly $2 roadside assistance fee since January 2004 without prior consent and later refused to offer refunds for the charge. The suit accuses Verizon Wireless of violating Michigan’s consumer protection act, breach of contract and unjust enrichment.
A Verizon Wireless spokeswoman declined to comment, noting the No. 2 mobile carrier has yet to file a response with the court.
