Saturday, July 08, 2006

Cingular accused of deceiving customers

What happens to the customers when AT&T takes over a competitor? According to a recent set of reports on a class action lawsuit filed against Cingular (ironic, eh? poetic justice, no?) the picture is pretty ugly. That's not reassuring as the South braces for the buyout of BellSouth by the newly reconstituted AT&T.

According to the accusations Cingular failed to maintain the customers' network as promised and "nickel and dimed" the customers with transfer fees and by forcing them onto new phones.

The lawsuit, which alleges breach of contract and violations of consumer protection laws, seeks class-action status on behalf of the more than 20 million customers AT&T Wireless had at the time of the merger. Many paid $18 "transfer" fees to switch to Cingular plans and were required to buy new phones or pay other fees, said the complaint filed in U.S. District Court in Seattle.

"Everyone who signed an AT&T contract had their service degraded," attorney Mike Withey said at a news conference Thursday.

In a strange twist of corporate irony, the company accused of abusing AT&T Wireless customers will soon to be AT&T Wireless again.

Cingular is supposed to take on the name AT&T Wireless after the takeover of BellSouth. BellSouth is currently a 40% shareholder in Cingular and it is widely bruted about that AT&T is not buying BellSouth for its Southeastern network--which is losing marketshare and lines every year--but to gain full control of Cingular which is making nice piles of money.

The switch to the name AT&T Wireless makes sense in a way--when SBC bought AT&T recently it took on its historic name. Having AT&T in the name of both the wireline and the wireless services would unify the brand. What's a little odd is that Cingular bought AT&T Wireless back in '04 and didn't take the name then. The scuttlebutt was that it had become damaged goods.

The experience of AT&T Wireless customers does not bode well for BellSouth's customers. AT&T customers could, at least, wait out their contracts and jump ship for a competing wireless service if they wanted. BellSouth's landline customers will have no such alternative.

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