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AT&T overbilling on iPhone, iPad accounts [u]

updated 12:50 pm EST, Mon January 31, 2011

Carrier allegedly billing inactive phones

(Updated with AT&T response) AT&T is "systematically" overbilling iPhone and iPad users for data, a new federal class action lawsuit argues. "AT&T's bills systematically overstate the amount of data used on each data transaction involving an iPhone or iPad account," a document submitted on behalf of plaintiff Patrick Hendricks reads. The carrier's scheme is akin to a rigged gas pump that "charges for a full gallon when it pumps only nine-tenths of a gallon into your car's tank," the complaint continues.

A consulting firm hired by Hendricks' lawyer is said to have conducted a two-month study, in which it found that web traffic was typically overstated by 7 to 14 percent, but potentially in excess of 300 percent. If an iPhone user downloaded a 50KB website for example, an AT&T bill might overstate the traffic as 53.5KB. The billed usage would potentially go as high as 150KB, the suit says.

AT&T is in fact billing customers when they aren't using data, Hendricks' lawyers allege. The consulting firm is noted to have bought an iPhone from an AT&T store and immediately turned off push notifications and location services, also making sure no apps or e-mail accounts were active. Leaving the phone inactive for 10 days is nevertheless said to have resulted in billing for 2,292KB of data spread over 35 transactions.

The suit suggests that while such practices will only have a "modest effect" on a single person, they may cumulatively help to pad a "significant portion" of AT&T's data revenues. Hendricks is accusing the carrier of breach of contract, unjust enrichment, unfair competition, unfair and fraudulent business practices, and lastly breaking the federal Communications Act. As compensation he is asking for restitution and class damages.

Although the iPhone and iPad both began their lives with unlimited data plans on AT&T, the carrier has since switched to a capped system. In the case of an iPhone, for example, overage charges begin to apply past a standard 2GB cap. AT&T is said to be allowing some people to switch back to unlimited data to prevent them from migrating to the Verizon iPhone, which launches February 10th.

Update: "Transparent and accurate billing is a top priority for AT&T," an AT&T representative has responded, speaking with MacNN. "In fact, we've created tools that let our customers check their voice and data usage at any time during their billing cycle to help eliminate bill surprises. We have only recently learned of the complaint, but I can tell you that we intend to defend ourselves vigorously."


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Comments

  1. yticolev

    Forum Regular

    Joined: May 2002

    +5

    I wonder

    if they are billing for infrastructure overhead, like switching towers, or GPS data calculated from tower position. What else might account for a data call in the absence of active services?

  1. rjdude

    Fresh-Faced Recruit

    Joined: Apr 2009

    -4

    It's a smartphone

    or data addict if you will!

  1. jfgilbert

    Fresh-Faced Recruit

    Joined: Jan 2010

    +6

    Good argument for metered Internet service

    AT&T can't wait to follow the Canadian ISPs and start charging by the byte, for all Internet access. They are tuning their algorithms to see how far they can go overcharging before people notice and push back.

  1. Ryszard

    Fresh-Faced Recruit

    Joined: Apr 2010

    +2

    Email?

    Turning off email and voice mail is not mentioned and it doesn't say the phone was turned-off, just "not used." Even if you don't get or send any emails, the phone checks for them. That's data use.

    In general, just because a user doesn't generate any activity doesn't mean the phone and its various functions don't.

  1. cmoney

    Mac Enthusiast

    Joined: Sep 2000

    +7

    Re: Email?

    They do mention in the original article that they confirmed no email account even existed on the phone, so it's a bit strange.

  1. alansky

    Fresh-Faced Recruit

    Joined: Mar 2000

    +13

    WTF???

    When individuals steal money, they face criminal charges. How did we ever get to the place where corporations can lie, cheat and steal to their hearts content without fear of any penalties whatsoever other than "restitution"?

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: Email?

    They do mention in the original article that they confirmed no email account even existed on the phone, so it's a bit strange.

    It isn't strange. Visual Voicemail works over the data connection. So the phone has to still receive traffic from the carrier and download the voicemails for it to work.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -1

    Re: WTF???

    When individuals steal money, they face criminal charges. How did we ever get to the place where corporations can lie, cheat and steal to their hearts content without fear of any penalties whatsoever other than "restitution"?

    They face penalties. But that doesn't stop people from suing. It's just that people (read lawyers) find it much more profitable and lucrative to sue corporations than worry about them facing any type of legal penalty. We're talking sweet settlement cash, people.

    You can sue individuals who steal money and face criminal charges as well. Most people don't, however, as the costs are higher than the return.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -3

    Oh

    I love how if someone sued Apple over such silly claims as this, it would be mocked as a moneygrab, and that there's too many lawsuits. But it's ATT, so it must be valid, right.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Download size

    A consulting firm hired by Hendricks' lawyer is said to have conducted a two-month study, in which it found that web traffic was typically overstated by 7 to 14 percent, but potentially in excess of 300 percent. If an iPhone user downloaded a 50KB website for example, an AT&T bill might overstate the traffic as 53.5KB. The billed usage would potentially go as high as 150KB, the suit says.

    This is garbage information tied to a garbage lawsuit. First off, there's no such thing as a '50KB website'. And was it EXACTLY 50K? Did they test their desktop computer on a wired connection and verify it used exactly 50KB of traffic?

    And what did they download? Because the internet does not transmit binary as binary. So if you're downloading 50KB of images, you're actually downloading like 80KB of images, because those pictures get converted to Base64, which makes for a much larger file. Did the website have ANY AJAX/web 2.0 fanciness, which adds to the chatter?

    And do they take into account corrupted or mangled traffic? Every packet on a download is checked to verify it has been downloaded again. Did they make sure they had a solid data connection before running their tests? Oh, wait, what am I talking about. This is the group hired by the guy suing over 3K worth of extra download (or maybe 150K!). Of course they're going to do what they can to make the numbers sound incredibly bad.

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