The parties have reached a tentative $12.4 million settlement in a class action filed against Ameritech Corporation (now a subsidiary of SBC communications, Inc.) on behalf of Illinois residents who signed up for Ameritech's "SimpliFive" local calling plan, which ended up costing more money for nearly half of those who participated. As of July 12, 2004, no claims deadline had been set in the action-- persons eligible to participate in the settlement should contact the attorneys for the class for more information.

According to the settlement terms, class members who are still SBC customers will get a $25 credit on their phone bills, while former Ameritech customers will get a $25 check.

The lawsuit was spawned by a January 24, 2001, Illinois Commerce Commission ruling that concluded that the company marketed the plan primarily as a way for customers to save money, but nearly half of those who signed up did not see any savings. "While the simplicity of the [SimpliFive] rate structure is also addressed by the Ameritech mailings, it is only a secondary element in the overall communication," the Commission wrote. "The principal message is that the customer will save money." The Commission ordered Ameritech to make clear in its marketing that savings depend on a customer's call patterns and are not guaranteed.

Ameritech endured withering criticism from consumer advocates and others for alleged excesses in marketing-- for example, trying to sell expensive phone packages and second phone lines to nursing-home residents. In the present lawsuit, the only thing at issue was Ameritech's SimpliFive calling plan. SimpliFive offered discounts on calls made to places 15 miles or more away. However, the plan charged more for calls to locations within 15 miles than Ameritech's basic phone service did. The action alleged that Ameritech continued to tell people they could save by switching to SimpliFive-- unjustly and unreasonably misleading consumers.

The SimpliFive issue surfaced when the Illinois Citizens Utility Board (CUB) released a study showing that customers who sign up for SimpliFive stood to lose $22 to $150 a year, depending on their calling patterns. Many people rarely call more than 15 miles from their home, the study said, meaning they would see little benefit from SimpliFive. CUB filed a complaint with the ICC alleging that Ameritech was violating the Illinois Consumer Fraud and Deceptive Practices Act, and the Commission upheld many of the consumer group's allegations and ordered the violations stopped.

Court records indicate that there may be as many as 496,000 potential claimants in the settlement. Finalization of the settlement has been postponed until July 15, 2004, due to objections by the Illinois Citizens Utility Board, which objected because it objected that language in the release statement was too onerous given the settlement amounts that would be received by each claimant.