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FACTSHEET

FTCR Lawsuits Fight Cell Phone Abuses

Foundation for Taxpayer & Consumer Rights v Nextel
The Nextel suit, filed in October 2003, charges that the company unilaterally ceased providing a fully-itemized, printed bill to consumers, making it impossible to determine the accuracy of the bill. As the suit alleges, all of Nextel's California customers were improperly charged for four spam text messages in the first month of the new billing policy and the charges were concealed by the non-itemized bills. Nextel now demands $2.50 per month to mail an itemized bill for calls that exceed a customer's plan minutes. The suit demands that Nextel stop charging people for the fully itemized bill and for spam text messages and make refunds.

Nextel had asked the court to dismiss the suit in 2004, arguing that if consumers didn't want to pay for the previously free itemized bill, they could go to the library and obtain their billing information through the internet, or keep a personal diary of all the calls they make. Nextel also claimed that federal law prohibits lawsuits challenging Nextel's practices. But Superior Court Judge David Workman ruled against the company, allowing the case to proceed. Today, the Judge will rule on Nextel's attempt to invoke Proposition 64 to block the suit.

Foundation for Taxpayer & Consumer Rights v Cingular; J Marvin Campbell v Cingular
Two Cingular suits, a class action and a representative suit brought by FTCR on behalf of affected customers in October 2003, charge the company with falsely advertising the quality of coverage the company provides in order to boost subscribers and revenues; maintaining inadequate facilities to meet the requirements of the customers recruited by the false advertising, which in turn led to dropped calls, static, or inability to place calls; inadequate customer service staff; inadequate disclosure of charges; improper billing; and levying $150-plus "early termination fees" to prevent dissatisfied customers from going to a different company. Citing similar abuses, the California Public Utilities Commission ordered Cingular to pay a $12 million fine for its conduct -- but noted that only through litigation can consumers be fully reimbursed. (Cingular sued in state court to invalidate that decision). The cases have since been combined with similar suits against Cingular in San Diego; Cingular is charging that Prop. 64 prohibits the FTCR suit, but is awaiting a judicial decision on whether the "arbitration clause" in its contract prevents a court from deciding the case.

Foundation for Taxpayer & Consumer Rights v AT&T, T-Mobile, Cingular
This suit filed by FTCR against Cingular, AT&T Wireless and T-Mobile in June, 2004, alleges that the companies surreptitiously insert software in the phones they sell in order to disable the phones from being used on another company's system, even though the phones were manufactured to allow them to be used with different companies. According to the suit, filed in Los Angeles, cell phones sold by T-Mobile, AT&T and Cingular were designed to allow users to swap a chip inside their phone that identifies them as a customer of one of the companies. However, the complaint alleges that the three companies have inserted software inside the phones they sell to prevent such interchangeability, a practice known as "handset locking." Thus, a dissatisfied customer of one company must be willing to buy a new phone and throw away an otherwise perfectly good phone in order to change carriers. The result, the consumer advocates said, is that many consumers are forced to stay with a cell company whose service they find unsatisfactory, competition is frustrated, and usable phones clog our landfills.

That case has since been transferred to Alameda County and combined with similar suits against these and other cell phone carriers. The defendants in those cases have also asked the court to dismiss the lawsuits on Prop. 64 grounds.


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