AT&T Hit By Class Action Lawsuit For Overcharging iPhone Users For Data Usage

Posted by Whizkid on Feb 01, 2011 | Comments (36)

IS Drive iPhone app

A disgruntled AT&T user has filed a class action lawsuit against US Carrier alleging that it is overcharging users of iOS devices like the iPad and the iPhone for data usage.

Patrick Hendrix alleges that AT&T is claiming bogus data usage even when an iOS device is left idle and claims that he hired an independent consulting firm to conduct a two month study on AT&T’S practices for data usage.

According to the lawsuit:

“AT&T’s bills systematically overstate the amount of data used on each data transaction involving an iPhone or iPad account and bills customers for data transactions even if they disable their phones and leave them untouched”. It goes on to describe AT&T’s billing mechanism as a “rigged gas tank that charges pump that charges for a full gallon when it pumps only nine-tenths of a gallon into your car’s tank.“

Based on the two month study conducted by the hired consulting firm, Hendricks claims that on an average, AT&T overstates the data usage by 7 to 14 per cent and in some instances, up to 300 per cent. Another startling claim by Hendrix is that AT&T also charges users for “phantom” data usage where the user is charged for data transfer even when the device is left idle for hours.

“Not only does AT&T systematically overbill for every data transaction, it also bills for phantom data traffic when there is no actual data usage initiated by the customer.”

To verify this, the consulting firm hired by Hendrix purchased an iPhone from AT&T and, disabled all notifications on it and did not configure any mail accounts on it. To make sure no applications connect to AT&T, all applications were closed ensuring none were running in the background. After leaving the device untouched for 10 days, it still managed to rake up over 2 MB of data usage in a total of 35 data transactions. Patrick adds:

“This is like a rigged gas pump charging you when you never even pulled your car into the station.”

While it is quite normal for multitasking enabled apps running in the background to consume data, the suit clearly states that they made sure no apps were running in the background.

The suit also claims that a significant portion of AT&T’s wireless data revenues amounting to $4.9 billion in the last quarter were inflated by overcharging users. These are serious allegations against AT&T. AT&T’s spokesperson has issued the following statement:

“Transparent and accurate billing is a top priority for AT&T. 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.”

Have you ever felt that you’ve been overcharged for data usage by AT&T?

[Courthouse News Service via PC World]

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Related Topics: Carriers, iPhone News

  • Mark

    I’ve always felt that cell phone companies charged too much for data, minutes and any other service.

  • Lee

    Wow! Everyone is filing a lawsuit everyone.
    I’m thinking of file a lawsuit for not release unlock for 4.1
    Lol…… JK ..,,, release sooner pls

    • flyez

      i agree with you 100%, lets file a lawsuit against the Dev team for not releasing 4.1 unlock
      and another lawsuit against apple for closing all the port holes that dev team uses to unlock iphone 🙂

  • hxclos

    Don’t you enable the Fetch feature automatically when you disable Push Notifications? It would be a logical explanation unless he has it set to manually.

    • FredMC

      What is there to Fetch if no mail accounts are configured?

  • Someone

    I still have the unlimited plan so I could care less 🙂

    • stranger

      you mean you couldn’t care less.
      cause if you could care less that suggests that it does hold some sort of importance.

    • Jim

      You should care. They’ll soon claim you’re in the top 5% of data users and limit your speed for the rest of the billing cycle

  • Christoph

    Hmm, until recently you had to sign up for an unlimited data plan if you wanted to have an iPhone. So personally I have never been “over”-charged for data (let’s ignore how I feel about the base price). Of course, things now look different with the new, capped data plans.

  • Jatt

    i love unlimited data………………………………………………………………………………………………………………………………………………………………………………………………………………. 6gb……………………………………………………………………….7.5 gb…………………………………………………..8gb

  • Greg

    Doesn’t beat P Diddy being sued for $1 trillion. 900 billion in child support and 100 billion in loss of income. Also accused of masterminding 9/11.

  • Koomoo

    Lol @ AT&T hope they lose a lot of money over the lawsuit

  • USA

    this idiot just want some money…. he even hired inspector gadget…. wow

    you can always talk to att and adjust the mistakes if there’s any… they’re very good at that.

    • Djman10

      It seems that idiots are always the first to call others idiots. Not that I’m calling you an idiot. Not at all. But, it’s a class action suit which means that if AT&T looses all affected AT&T customers win. We all would get a share of the award. Also, the suit, if it is not baseless, publicly exposes an issues we should all be aware of and would force AT&T to correct the “problem.”

      • Usa

        Get a job idiot. Didn’t mean to call you an idiot, idiot. Lol but AT&T won’t give you money for a cheeseburger.

  • arran

    awww its so sad to hear all the complaints in the US about data related stuff. In singapore, all telcos give 12gb free data everymonth, basically its impossible to finish that allowance! yes 12gb, no typo here.

  • jared

    i had/have a very similar problem. wish i could talk to the guy.

  • John

    The problem is that att doesn’t always post the data usage info at the time it’s used and instead consolidates some into one entry while they single out other entries. In looking at my data usage, I also notice that there’s 1-2mb of data per day being charged to my account even when I’m home and on wifi the entire time.

    It’s due to the iphone turning off wifi when it goes into locked mode. During that time, it seems that data is being sent through 3g and not wifi. I’d like to see this fixed by apple through an option to turn it off.

    The only solution that I know of now is to turn off cellular data network when at home or when I’ll be around wifi access for awhile.

  • DaddyRex

    I had been suspicious of fraudulent practices like this. My wife got a limited data iPhone last month and has only used the phone a few times. Essentially no data use and 2 apps that she hasn’t used. When I checked her data usage, it shows a surge of about 250 KB almost every night after midnight when we are sound asleep.

  • fas

    Looks like ATT needs to recheck it act.

  • Harry

    I bet you the phatom datais from the clock and weather app and if you have a 3GS or iPhone , even the compass.

  • Jon

    This is likely a software issue with the iPhone and not so much a network issue with AT&T. The real test is if the phone is turned completely off, does AT&T still clock in even a bit of data usage onto the account? If not, then it’s obviously the phone and not the network that’s initiating the data transfer.

    That said, I still wish AT&T would give us back unlimited data plans!

    • John M

      As somebody who posted on this site and clearly has access to public information, you would know that At&t came out and already stated they would re-enact unlimited data for current iPhone subscribers.

      • Jon

        Umm… No, AT&T hasn’t publicly come out with unlimited iPhone data plans. Get your facts straight kid.

  • wolverinemarky

    loving my unlimited data plan so i dont have this issue with being over charged but man this dont look good for AT&T although it does sound like more of an iphone issue

    • Me

      The problem is with iternational travel does your plan cover that mine didnt

  • King

    I am going to file a lawsuit on Apple for not releasing the unlock code for the iphones (2g, 3g, 3gs) which were out of contract…:)

  • Crazy Asylum

    its probably the iphone, the only way i could see them having a solid case is if every type of smartphone on at&t network got these charges

  • Common sense

    The reason why the IPHONE connects to the internet even when idle, is because the network is constantly updating the phone’s profiles, but because the iphone cant receive OTAs (over the air) viathe regular GSM network the only other way is thru GPRS.

    This is why a data plan is required on most smartphones, some of them behave like this. Its not AT&T fault, its the design of the phone. So the lawsuit should be aimed at apple.

  • Flame Red

    Probably the Iphone sending “Hello” messages to keep the connection going. So it could be Apple’s IOS feature, or a feature of the firmware or chip set.

  • Ray

    I think the disgruntled user needs to stfu. If you don’t want data usage, don’t get a smartphone. Otherwise stop being a cheap ass and pay for the unlimited plan.

  • Mustang

    I worked in Tech Support for over 7 years for AT&T and believe me I cannot stand that place. I do still have my cell phone service thru them though. That guy is barking up the wrong tree though. The issue is with the iPhone, not the network or the billing system. The iPhone is designed to “update” itself periodically by its designer and AT&T has absolutely no control over that. Every time it does those updates you will incur a data connection and data charges will apply

  • Le

    I am using my iphone4 to download everything thru my laptop at home, even using it to play COD4. I got my unlimited data plan. Fuck AT&T home DSL!!

  • Me

    I made 4 phone calls sent 3 pics from canada cost so far $4,500. Ok I didn’t turn off my data roaming, but really $4,500 what they are doing should be stopped in it’s tracks it sucks if your on the end looking at that kind of bill

  • Me

    I would like to join the class action law suit

  • jen lombardi

    I’ve had my HTC inspire for one month, I also got one for my daughter and husband. We all got an over usage notification after 2 days of using our phones. So we all stopped using data, and disabled everything that wasn’t WiFi.at the end of that one and only month with at&t my bill it was over $800.00!!!!! For one month. I would love to join this lawsuit. Does anyone know how to go about this??