Lawsuit: AT&T "systematically overstates" data usage on iPhone bills

Lawsuit: AT&T "systematically overstates" data usage on iPhone bills

Summary: A class action suit alleges that AT&T's bills incorrectly charge for too much data consumption among iPhone users.

TOPICS: AT&T, iPhone, Legal, Mobility

One of the biggest problems that consumers have faced with mobile phone billing in recent years is that there's really no way of independently measuring the amount of data that's being consumed by a mobile Web session. Consumers are at the mercy of the wireless carriers and have put their trust in these providers to accurately bill them.

Now, AT&T finds itself at the center of a class action lawsuit that alleges that the provider's bills "systematically overstate the amount of data used on each data transaction." Granted, the overstatement that's being alleged is small - somewhere in the range of 7-14 percent monthly, according to a post on the Electronista blog.

What's especially telling is how a consulting firm that was hired by the lawyers of the plaintiff conducted its own test of the data billing. Instead of using data and trying to measure it independently for comparison against the bill, the consultant did the exact opposite. The firm bought a new iPhone and immediately turned off all push notifications and location services, made sure that no apps or email accounts were active and then left the iPhone idle for 10 days.

AT&T billed the account for 2,292 kilobytes of data over 35 transactions.

Granted, that's not a ton of data. But, multiply any overage charges by the number of iPhones that are being used on the AT&T network and it could have some impact on AT&T's data revenue numbers, the complaint alleged, comparing it the practice to that of rigged gas pumps that only pump nine-tenths of a gallon of gas but record a full gallon.

AT&T responded to the allegations in a statement to the blog. It read:

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.

AT&T previously offered an unlimited data usage package but switched to tiered packages with caps. Shortly after Verizon announced that the iPhone - which is hitting that network on Feb. 10 - would be eligible for an unlimited data package, AT&T reportedly has been allowing some of its iPhone customers to switch back to an unlimited plan on a case-by-case basis. The company has not confirmed that.

Regardless, this latest complaint illustrates how consumers remain confused by billing for data consumption. If I wanted to carry a stopwatch around, I could literally track and log all incoming and outgoing voice minutes used on my mobile phone over a given time period. But there is no easy way for consumers - or even independent firms - to accurately measure the data consumption.

And until there is, I wouldn't be surprised to hear more squawking about the billing for data. As the usage increases, the disconnect between carrier and customer potentially can only get worse.

I'm waiting for a copy of the actual complaint to be sent my way and will update this post with an excerpt, as well as a copy of the court filing, when it arrives.

Topics: AT&T, iPhone, Legal, Mobility

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  • What were the 35 transactions?

    It very well could be the "consultants" did not turn off everything. These smart phones "sip" data at a curious rate.

    My bet is they had email fetch turned on (though they thought they had mail "turned off" and once they figure that out, will be laughed at very loudly by the courts.
    • RE: Lawsuit: AT&T

      @Bruizer Could be. I wonder what their data rate would be with the iPhone in airplane mode only for a billing cycle - nothing active at all, just having the unit powered on...

      Makes me glad I kept my unlimited plan.
      • RE: Lawsuit: AT&T

        @athynz Kudos to everyone that kept their unlimited data plan like me!
      • RE: Lawsuit: AT&T

        Actually, there is no unlimited plan with AT&T. If you go over 5GB, you will be cut off from the network and they will tell you your contract has long expired. They will only reinstate your service if you agree to a 5GB cap. It already happened to so many users who thought they have an unlimited plan.
      • RE: Lawsuit: AT&T

        @pogopeggy If you had an iPhone when the unlimited plan was active, you're grandfathered into it when they eliminated it. I asked them about it, and they told me that I could save $5 and get the 20 Gig plan, but that I could keep the unlimited plan forever if I wanted to- the only catch was, if I ever got rid of it, of course I couldn't get it back.
    • RE: Lawsuit: AT&T

      @Bruizer It's common for carriers to round up. How much varies. There are some companies that will charge your carrier for 200KB, even if you only consumed 1KB. I'd be shocked if everyone isn't at least rounding up to the next KB on each transaction. Due to the way that some billing software works, they may round up to the nearest 10KB or more. Is it a ripoff? Sure. Welcome to the world of telecom.
    • Maybe they were "confused".

      The author seems to be confused about the meaning of "confused":<br><br>"this latest complaint illustrates how consumers remain confused by billing for data consumption"<br><br>They're not CONFUSED; they're lied to and ripped off. Spineless "journalists" and PR people love to misuse the word "confused" in order to pass the blame onto the victims, as if the victims were presented with clear and accurate information but somehow botched it. Call rip-offs what they are, or be called out as a shill.
      • RE: Lawsuit: AT&amp;T

        @dgurney -- Thank you for saying what most won't or are afraid to.
    • RE: Lawsuit: AT&amp;T


      You are making 2 unfounded assumptions:
      1. that the consultants were incompetent; and
      2. email fetch is on and running, even when the article says there is no email acount active.

      If smart phones sip data at a curious rate, why would consumers be made to pay for these sporadic data bursts which the users know nothing about and did not use. If the phone companies' reasoning is expanded to our entire daily lives, taxi drivers should charge us for the travel from their garage to our door steps because that trip is equally necessary to take us to our destination.
      • RE: Lawsuit: AT&amp;T

        @pogopeggy Good analogy
    • RE: Lawsuit: AT&amp;T

    • RE: Lawsuit: AT&amp;T

      @Bruizer Come on you know better than that. Who would worry about a tenth of a percent. Adds up thou just like the guy that was putting all odd cents in his banking account from his company. Ended up with a huge amount of maney.
    • Grandfathered Unlimited Plan?

      Many people thought they have this grandfathered unlimited plan for their datacards and iPhones, until they learn the hard way that if they go over 5GB in a month, they will be kicked out of the network. That's what they did to me when I used 7GB in a month. They will can always say that your contract has already expired, which is legally true. You cannot force them to renew that contract on the same terms. What they can do is force you to sign a new contract under their new plans.

      But there's only way to find out if you really have an unlimited plan: try to use more than 5GB in a month.

      But with the forthcoming entry of Verizon with its unlimited plan, maybe AT&T would now reconsider. I hope so.
      • RE: Lawsuit: AT&amp;T

        @pogopeggy <br>How funny and true is that. I currently on he legacy/old blue network of att and just got text on ALL Great Grandfathered accounts that my service will be terminated on the 15th of May and to renew for 2yr and get one of the new data packages. They say I'll save money on the new network and in reality I will be spending approx $10 extra a month per line.

        So if that happens, I'll move to Sprint or Tmobile and us that $10 and get "true" unlimited everything. I think on May 15 is when the att 4g goes live and that's why they sent that.
        Free Webapps
    • RE: Lawsuit: AT&amp;T

      If there was only 35 transactions in 10 days I doubt email fetch was the culprit. I do not believe the fetch interval can be set to greater than hourly.
  • RE: Lawsuit: AT&amp;T

    The overage could also depend on the point at which packet size is measured. Each layer in the IP protocol stack adds data to the packets. Splitting a packet in transit also adds extra wrappers around it. If you measure the packet size as it leaves an application, you have to expect that the exact same information will be 'fatter' as it crosses the airwaves/wire/WiFi/fibre/cable....
    • RE: Lawsuit: AT&amp;T

      @SteveCarr -- You describe overhead quite nicely, however, you oversimplified. The number of octets in a packet is defined by IP, but the number of frames is defined by the interface. AT&T decides how much data it carries per frame, but it can't pass that on directly to the user.
    • RE: Lawsuit: AT&amp;T

      @SteveCarr But if at&t is charging you for data, it should be data you requested, and you should not be charged for data their network requires. I say "should" because that's the way I think it should be...however when looking at their Customer Agreement:

      "Data sent and received includes, but is not limited to downloads, email, application usage, overhead and software update checks."

      F&#%ing overhead. I think they should have to carry the overhead or change the actual numbers given (e.g. "2GB") to reflect the balance some average of the overhead (like "Approximately 1.8gb").

      It shouldn't be a 2gb data plan if you can't actually download 2gb. That's misleading.

      Doubt the lawsuit will make it far though, especially if this lawyerly bunch failed to read the legal agreement which states that network overhead is included in users' data consumption amounts.

      Then again...maybe it's not network overhead, but rather some kind of ping thing going on where the phone is required to ping the network to keep in touch, and this is done over data (hence the requirement of the data plan)...

      I guess we'll have to wait for the complaint.
      • RE: Lawsuit: AT&amp;T

        @kasapo 2GB includes whatever data you send as well. So 4KB up 10KB down=14KB.
      • RE: Lawsuit: AT&amp;T


        You're right. What if phone companies program our phones to ping their cellsites regularly at frequent intervals -- too frequent than necessary. And these pings are charged to our monthly allowance? Or make our phones check for updates twice a day, which is simply too much. Who would say it's too much? These are all "overheads" that should be borne by the carriers, not the consumers. Overheads are fixed costs in a business that is paid by the business owner whether or not there is business (rent, advertising, power, etc.). Overheads are not to be charged to the customers.