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Cingular escapees win $160 each

California claws back $18.5m for unfair termination payments

Internet Security Threat Report 2014

Cingular Wireless will cough up $18.5m to settle a long-running dispute with California utilities watchdogs, who said it applied unfair fees when customers left its network.

Some of the cash will go towards refunding about 115,000 Californians who were charged when they wanted to leave their contracts. They will get an average of around $160 each, within 60 days, according to Cingular.

The argument dates to 2000-2002, when Cingular's pre-upgrade network buckled under the strain of call volumes. The California Public Utitities Commission (CPUC) argued that Cingular's terms at the time didn't give customers long enough to evaluate the standard of the service.

In 2004, the CPUC fined Cingular $12.1m for failing to tell customers its network was overloaded. That decision was upheld when Cingular took the dispute to the California appeals court. Since then the two have tussled over how much to refund customers.

Commissioner John Bohn said today's settlement "demonstrates that the PUC takes its enforcement responsibility seriously...it will get reparations back to affected consumers expeditiously."

In its statement, Cingular said: "Cingular's business practices have changed significantly since the period in question, and the company is now the industry leader in customer-friendly initiatives." The firm said it still had strong grounds to appeal against the Commission's again, but would be the big man and pay up, as well as withdraw an application to review the case it had made to the US Supreme Court.

Under today's settlement, the cellco is required to employ an independent administrator to process claims where records of charges no longer exist. ®

Internet Security Threat Report 2014

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