Lawsuit accuses AT&T of inflating iPhone, iPad data usage

By on May 19, 2011, 6:03 PM

A new class action lawsuit accuses AT&T of "systematically overcharging" iPhone and iPad users for data usage. Suspecting foul play, AT&T customer Patrick Hendricks and his lawyers hired an independent tech consultant who conducted a four-month study that determined AT&T inflates data consumption figures by an average of 7% to 14% and sometimes as much as 300%.

In an interview with MSNBC, attorney Barry Davis likened the discovery to a rigged gas pump that only dispenses 9/10's of a gallon. Davis said the researchers recorded discrepancies that bloated every single data transaction. Affected users may only pay an extra $10 or $15 per month, but that's big money when you multiply it by as many as 20 million iPhone and iPad owners.

In addition to overestimating legitimate data transactions, the suit accuses AT&T of so-called "phantom charges." The tech firm reportedly purchased a spanking new iPhone and disabled everything that might trigger data usage. After letting the handset sit on but unused for 10 days, it supposedly accumulated charges for 35 different transactions totaling nearly 3,000KB.

The tests also found that AT&T doesn't always record the correct time and date of data usage, causing some transactions to appear on the wrong bill. It's unclear how much cash AT&T might be making off the unscrupulous billing, but the suit didn't hesitate to note that the company's wireless data revenues increased by $1.1 billion on-year in the fourth quarter of 2010.

The carrier has responded to the allegations by saying that they are "without merit" and reflect a "misunderstanding of how data is consumed and billed." AT&T blamed some of the overages on applications that run in the background or those that are automatically updated. For instance, less tech-savvy users might not realize that features such as push notifications count toward their data limit.




User Comments: 22

Got something to say? Post a comment
princeton princeton said:

Is anyone really surprised?

Win7Dev said:

Princeton said:

Is anyone really surprised?

No.

tonylukac said:

I thought ATT got class action lawsuits abolished by the supreme court. Just in the nick of time.

Guest said:

I had an original iPhone as a house phone that sat dormant for weeks, just sitting on the cherger collecting voice messages. No internet use what so ever...

Since all of my bills are auto deducted & I rarely looked at the bill... when I did I flipped. AT7T had all kind of use charges, etc. In a 4 month period I made zero outgoing phone calls and zero text... my bill was $40 more than I had agreed upon. I canceled that day!

All the CEO's are theives.

(On the same note... I wrote a check wrong for CC was off on the due amount by $0.50 cents... 2 months later my interest rate goes from 4% to 29%... lol. )

Wall Street are crooks & thieves.....

gwailo247, TechSpot Chancellor, said:

clever strategy. Get people used to unlimited then yank the rug out from under them.

Archean Archean, TechSpot Paladin, said:

Guest said:

Wall Street are crooks & thieves.....

That is not a news any more. In fact, they have run out of targets in US, so now they are pressuring China through their stooges in Washington to open up its financial markets so they can put their ugly dirty hands on their roughly 10,800B$ savings/assets etc. Although I don't see them succeeding. Anyway back to topic, I hope if they are found guilty they are punished in such a way that no one else would dare rob their customers again (wishful thinking?).

Royalgok said:

Now the question is, is this limited to AT&T?

LinkedKube LinkedKube, TechSpot Project Baby, said:

royalgok said:

Now the question is, is this limited to AT&T?

Probably not but I pay an extra 50 dollars just because my droid is considered a smart phone.

Zecias said:

Win7Dev said:

Princeton said:

Is anyone really surprised?

No.

i second that

mosu said:

Let me tell you a short story:

A couple of years ago a phone company in my country charged me with a fee even I wasn't ever using the subscription. After two months, the said phone company had over 300 less subscriptions in my neighborhood, because of me.Please try this at home!...unless you're hooked to a single provider.

Guest said:

I had att,since 2007 without problems and on december of 2010 i started getting extremely hi bills for like 500 a month which i never paid. When you look at the bill, has a bunch of bogus charges. looking at the headlines, im joining this lawsuit.

Do not go to att !!! Theres plenty of unimited choices these days.

Guest said:

Since now they are making big money by the amount of data you use...shouldn't they be checked by some independent hardware and company like gas pumps are....Glad they discovered this...I mean you just take them for their word that they are accurate...but these are greedy corporations and they never have enough money....

Guest said:

Did you ask AT&T for the itemization of these transactions?

Guest said:

I think the most logical thing would be to ask AT&T for the itemization of the bill. Data traffic has overage, and, for example, if you have 300MBit DSL, your speed is lower than that, this is well known fact and expected. And indeed with the tendency of today's software to spy on user, call home, self-update, and God knows what else, only naive can expect zero traffic when you don 't touch the phone. There were even rumors that government is spying on everyone via their phone even when the phone is turned off; however conspiracy this sounds, it can't be completely written off. I think the only clean possibility to ensure zero traffic would be to remove its battery and to put the phone in a metal box.

Guest said:

What this article doesn't mention is that the phantom charges happen even when the phones are connected via WiFi at home.

Appzalien said:

This is the same AT&T that asked the government to let them discontinue hard wired telephone service. Sure there are a lot of people out there that depend more on cellular than wired, but that's just what they want. Once they get rid of the hard wired telephone pole system, they have an excuse to not spend money on upgrading that infrastucture (it's falling apart now and they don't fix it) and spend all their money on the infrastucture that lets them steal and overcharge. If Americans were smart, they would drop their cellular service for a few years and go back to wired and screw AT&T real good. Unfortunately Americans are not smart, their dependent, like sheep.

peperonikiller peperonikiller said:

Appzalien said:

This is the same AT&T that asked the government to let them discontinue hard wired telephone service. Sure there are a lot of people out there that depend more on cellular than wired, but that's just what they want. Once they get rid of the hard wired telephone pole system, they have an excuse to not spend money on upgrading that infrastucture (it's falling apart now and they don't fix it) and spend all their money on the infrastucture that lets them steal and overcharge. If Americans were smart, they would drop their cellular service for a few years and go back to wired and screw AT&T real good. Unfortunately Americans are not smart, their dependent, like sheep.

you sir, are not smart.

johntom2000 said:

Its just like them putting a cap on their DSL. I had unlimted for years now we are all getting the short end of the stick.

example1013 said:

zecias said:

Win7Dev said:

Princeton said:

Is anyone really surprised?

No.

i second that

Thirded.

howzz1854 said:

FRRRAAAKKKK!!... this is exactly why we shouldn't let them merge with T-Mobile. there'll be more and more things like this happening with less competition.

Guest said:

Doesn't surprise me. They tried to bill me hundreds because they said I was using my phone in Mexico. I called in the first couple of times and told them I lived less than 5 minutes from the border and they cancelled the charges, but it continued for months. Finally I told them to f off When they tried to collect, I got them to stop. When they tried to put it on my credit report, I got it removed.

Guest said:

I wonder how much they make on unused data that you pay for but never use on your iPad? How can they legally charge you for it and not either refund you or let you accumulate it on your account?

Load all comments...

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.