The 22-page suit (click for PDF), filed Thursday in U.S. District Court in Seattle, was brought by two West Coast law firms and the Foundation for Consumer and Taxpayer Rights, a California-based advocacy group that said it has fielded numerous complaints related to the suit's allegations.
The complaints center on accusations that Cingular didn't live up to advertising campaigns promising that AT&T Wireless customers would "continue to enjoy the benefits of their current phones, rate plans and features, without any service interruption," after Cingular acquired AT&T Wireless.
The suit accuses Cingular of engaging in a "deliberate scheme" to degrade the service of those AT&T subscribers in order to command "significant additional charges" for improvements such as requiring the purchase of a new Cingular phone, payment of an $18 transfer fee, or entry into a contract that was "less favorable" than the subscriber's existing AT&T plan.
One of the seven plaintiffs named in the suit, Christine Aschero, said she was "very happy" until the merger occurred. "That's when all the trouble began," she said in a statement released by the Foundation for Consumer and Taxpayer Rights. "Dropped calls, my phone not ringing, I didn't get voice mails, and my phone would randomly go into 'emergency mode.'"
Those who chose not to make the switch had to deal with an increased number of dropped calls and poor or nonexistent reception--or pay a $175 penalty to leave their contracts early, the suit said.
Cingular dismissed the allegations in a statement released Friday afternoon, deeming the suit "completely without merit."
Joaquin Carbonell, the company's executive vice president and general counsel, said Cingular "has spent nearly $10 billion in integrating and improving its networks in the 21 months since the merger was completed, leading to a significantly improved customer experience and the fewest dropped calls of any national carrier."
He also issued a warning to the suit's filers, saying the company was separately "considering our options with respect to the false and misleading statements made to the media by the lawyer that brought this case."
It was unclear exactly which statements Carbonell was referring to. In an Associated Press story published Thursday, attorney Mike Withey was quoted as saying at a Seattle press conference, "Everyone who signed an AT&T contract had their service degraded."
The suit covers all AT&T Wireless customers as of Oct. 26, 2004, the date that Cingular acquired AT&T Wireless. It seeks a jury trial and treble or punitive damages for those covered by the claims.
Earlier this month, a California state appeals court upheld a $12.1 million fine against Cingular that had been ordered in 2004 by the California Public Utilities Commission. The PUC found that the wireless carrier had been signing up more customers than its network could handle and then forcing them to pay as much as $550 to cancel their service.