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AT&T Accused of Rigging iPhone Data Usage Meter to Overcharge Consumers

Phillip Dampier February 2, 2011 AT&T, Consumer News, Internet Overcharging, Wireless Broadband 4 Comments

A snake in the grass?

You used 50 kilobytes of data visiting a web page on your iPhone, but AT&T claims the site actually consumed six times that — 300 kilobytes, for which the carrier overcharged you for access.

A major point of contention for consumers facing Internet Overcharging schemes is that the same company with a vested interest in maximizing revenue from such schemes also administers the meter that measures how much you used.  There is no oversight or independent verification.

In a lawsuit filed this week, AT&T Mobility faces accusations it is systematically overcharging iPad and iPhone users for data services many never used.

Patrick Hendricks claims AT&T’s Internet Overcharging “was discovered by an independent consulting firm retained by plaintiff’s counsel, which conducted a two-month study of AT&T’s billing practices for data usage, and found that AT&T systematically overstate web server traffic by 7 percent to 14 percent, and in some instances by over 300 percent.”

The lawsuit compares the company’s billing system to a gas pump that charges for a full gallon when it only dispenses nine-tenths into your tank.

Hendricks’ suit also claims the same independent testing firm confirmed AT&T charges for data usage even when phones and iPads were disabled for data sessions, push notifications, location services, and other data features.  After 10 days, the firm found AT&T had billed 35 data transactions totaling 2,292 kilobytes of usage, akin to being billed for gas when you never even pulled into the station.

The complaint admits the individual overcharges are relatively small for most consumers, but collectively they earn massive profits for AT&T.

“AT&T has 92.8 million customers. In the fourth quarter of 2010, AT&T reported its wireless data revenues increased $1.1 billion, or 27.4 percent, from the year-earlier quarter, to $4.9 billion,” the suit claims. “A significant portion of those data revenues were inflated by AT&T’s rigged billing system for data transactions.”

The lawsuit is seeking class action status and refunds of alleged overcharging for impacted customers.

The firm handling the case, Bursor & Fisher, has tangled with cell phone providers before, winning cases against Verizon, Sprint and T-Mobile.  The firm is also exploring a lawsuit against Sprint on behalf of Evo owners who paid a $10 surcharge on top of an “unlimited” data plan.

Currently there are 4 comments on this Article:

  1. jr says:

    Smartphone customers suffer while CEOs prosper

  2. Lexster says:

    Wow, I’m assuming they have pretty damning proof if they’re through with the lawsuit. If true, this may be a major blow to people’s trust in AT&T. People are already likely to switch to Verizon to get off of AT&T’s horrid network. Now they may switch so they aren’t charged for data they don’t use.

  3. DM says:

    The same thing is happening with TMobile. I’m currently a prepaid customer (after coming from a long contract with Verizon, I’m very leery of contracts). I have gone through 30mbs of data in a matter of 1 day according to TMobile. However, my iPhone has a cellular data usage monitor and it shows I only used 2.5mb of data. The discrepency between what TMobile says and what my phone is showing is enormous. TMobile has no comment and doesn’t know what’s happening. Their answer is that my iPhone is running apps in “the background” and that’s why I’m using so much data. The fact is that I’m on wifi nearly all the time, and have all push features shut off…and I shut off cellular data nearly all the time as well.
    For my phone to show 2 mb of data being used, and TMobile saying I used 30mb–which was how much my plan allotted for the entire month–I find it very disturbing.
    I’m starting to think maybe TMobile is working along the lines of AT&T and trying to cause data overages where customers have to pay for their “Web Day Pass” in order to get online…which would mean customers having to pay an additional $1.50/per day…
    It sounds to me like there is something fishy going on…

    • The_Jerk says:

      @DM — If your router has logging capability, you can double-check the accuracy of your phone’s app. That way you’ll have two separate pieces of equipment to monitor your phone. Request a copy of the logs that your provider has, even though they probably won’t give it to you, and offer to reciprocate with an exchange of your data.

      If you find a discrepancy within your personally recorded data, then try to contact the application developer to determine it’s not a software bug. Then ask TMobile again how they can logically demand that you pay 1200% over your actual usage…

      The “something fishy” you allude to is a sub-industry within the industry that is nearly decades old now. They’ve found out that some people will pay their bills without questioning the accuracy of those charges, and they’ve been doing it since the brick-phone days…

      And we wonder how the top 0.5% came to control more than 90% of the wealth. “Greedy Pig” shareholders and corporations are the answer to that question. They have no shame, they have no remorse; only your hard-earned money… Don’t let (any of) them rob you without a fight!

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