ATandT 'Systematically Overcharging' iPhone, iPad Users: MSNBC

 
 
By Michelle Maisto  |  Posted 2011-05-24 Email Print this article Print
 
 
 
 
 
 
 

AT&T is overcharging iPhone and iPad users for data in every single transaction they make, according to a new report from MSNBC.

The issue of whether AT&T is overcharging the roughly 20 million Americans with iPhones and iPads for their data use has been brought back into the spotlight by an MSNBC investigation.

According to the MSNBC investigation, lawyer spent $80,000 and several months testing the data used by iPhones and iPads on both the AT&T and Verizon Wireless networks. The attorneys found that AT&T "systematically overstated data usage by 7 to 14 percent - sometimes as much as 300 percent."

"Did you find overcharges on every single transaction?" MSNBC's Lisa Meyers asks a representative of the firm investigating the matter in footage of the report.

"Yes, every single one," he answers.

"Did you ever find an instance where the discrepancy worked to the benefit of the customer?" Meyers responds.

"Never," the representative answers. "Always an overcharge, never an undercharge."

Meyers goes on to explain that an independent engineer asked to look into the matter bought a new iPhone, disabled everything that might trigger data usage and let it sit idle for 10 days.

"When the bill came in, there were charges for 35 different transactions," said Meyers.

AT&T's response is that applications may automatically update or refresh in the background, using data the consumer is not aware of. In instances where a bill shows data usage and charges - "phantom charges," as they've been dubbed - during the night, when the owner was in all likelihood asleep, AT&T argues that its network is only then tallying data use from during the day.

In a response sent to the Boy Genius Report, AT&T replied, in part:

Accurate billing is clearly important and, unfortunately, there have been some incorrect claims about our data usage billing practices. We properly charge for all data that our customers send and receive, including data activity that runs in the background on smartphones and other powerful data devices. Data usage for emailing, downloading applications, browsing the web, downloading a video or streaming music is all applied to a customers' data plan. So are real-time updates to applications, such as weather updates, sports scores, or stock tickers. Particularly for smartphones, tablets and other advanced mobile devices, applications are often constantly running in the background and engaged with our network.

In January, AT&T was the subject of a federal class-action lawsuit that similarly accused it of "systematically overstating the amount of data used on each data transaction involving an iPhone or iPad," and appears to be the basis for the MSNBC report.

It was filed by Patrick Hendricks, who stated in his claim, according to a report from the Courthouse News Service, "This is like the rigged gas pump charging you when you never even pulled your car into the station."

An AT&T spokesperson, responding to the lawsuit at the time, said AT&T intended to "defend [itself] vigorously."

During the first quarter, AT&T added 2 million new wireless subscribers, sold 5.5 million smartphones and reported overall profit of $3.4 billion on revenues of $31.2 billion. 

 
 
 
 
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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