ATandT Sued for Allegedly Overbilling Apple iPhone, iPad Users

 
 
By Michelle Maisto  |  Posted 2011-02-01 Email Print this article Print
 
 
 
 
 
 
 

AT&T is reportedly facing a federal class-action suit for "systematically" overstating the data use of iPhone and iPad owners.

AT&T reportedly is facing a federal class-action suit alleging that it "systematically overstates the amount of data used on each data transaction involving an iPhone or iPad," according to the Courthouse News Service, a site for lawyers and the media.

According to the Jan. 31 report, the suit was filed by a Patrick Hendricks, who said that an independent consulting firm he hired conducted a two-month study of AT&T's billing practices for data usage and found that the system consistently overstates the amount of data used, by 7 percent in some instances and up to 300 percent in others.

The news site goes on to quote Henricks' claim, which continues:

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. This was discovered by the same independent consulting firm, which purchased an iPhone from an AT&T store, immediately disabled all push notifications and location services, confirmed that no e-mail account was configured on the phone, closed all applications, and let the phone sit untouched for 10 days. During this 10-day period, AT&T billed the test account for 35 data transactions totaling 2,292 KB of usage. This is like the rigged gas pump charging you when you never even pulled your car into the station."

The suit also claims that the overcharges, while only modestly affecting an individual's bill, have a significant impact on AT&T's bottom line when spread across its entire user base. During the fourth quarter of 2010, AT&T announced Jan. 27, it added 4.1 million iPhones to its network and increased its wireless data revenues by $1.1 billion.

"A significant portion of those data revenues were inflated by AT&T's rigged billing system for data transactions," states the Hendricks suit, according to the report. 

AT&T has offered no statement on the suit, though a spokesperson for AT&T commented, "We have only recently learned of the complaint, but I can tell you that we intend to defend ourselves vigorously. Transparent and accurate billing is a top priority for AT&T," according to Computerworld.

This is hardly the first time that AT&T, in conjunction with its Apple iPhone, has been served with a legal suit. Following the June 2010 debut of the Apple iPhone 4, and the "Antennagate" issue that followed, AT&T and Apple were accused by Maryland residents of knowingly selling a faulty product. Specifically, the suit accused the pair of, among other things, general negligence, breach of warranties, deceptive trade practices, intentional misrepresentation, negligent misrepresentation and fraud by concealment.

In July 2010, a class-action suit focused on the secrecy of the exclusivity agreement between AT&T and Apple, alleging that since the two had secretly agreed that AT&T would have exclusive rights to the iPhone for five years, consumers who had signed two-year contracts were essentially forced into five-year agreements.

And in 2009, AT&T, AT&T Mobility and Apple were sued for over promising and under delivering by a New Jersey man who said that his iPhone only connected to AT&T's 3G network a fraction of the time. It wasn't the first time that the pair had been accused of false speed claims, as they'd already faced similar suits filed in California in 2007 and 2008, Alabama in 2008, and Florida and Texas in 2009.

Hendricks is reportedly seeking restitution and class damages for money had and received, breach of contract, unjust enrichment, unfair and fraudulent business practices, unfair competition and violations to the Federal Communications Act.

 
 
 
 
 
Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.
 
 
 
 
 
 
 

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