Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

Summary: The latest class action suit against the telecommunication giant for overbilling data usage may not ever go to court. Read on to find out why not.

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Barry L. Davis, the lead lawyer on the class action suit against AT&T for "systematically overbilling" iPhone and iPad users, appeared on NBC's Today Show yesterday to share some details of the study that is at the center of the important case (video is below). However, the Supreme Court's April decision to uphold AT&T's user agreement that bars class action suits and forces individual arbitrations may prevent this case from going to trial.

Davis of Thornton, Davis & Fein, and Scott A. Bursor of Bursor & Fisher, are representing Patrick Hendricks and a class of similarly affected individuals in the suit before the United States District Court for the Northern District of California. They asked an IT consulting firm to study the billing practices of AT&T for iPhone and iPad data usage over a four-month period. In fact, the experts conducted the study using new devices and "disabled everything that could trigger data usage," according to Lisa Myers of MSNBC. When the engineer left an iPhone on but untouched for 10 days and compared the usage to the AT&T bill,  was charged for 35 transactions "totaling almost 3,000 KB," said Davis.

Here are the other claims in the suit as described in the press release:

  • AT&T bills systematically overstated data usage by 7 to 14 percent, and in some instances by more than 300 percent. For example, an IPhone user who downloads 50 KB would actually be billed for 53.5 KB to as much as 150 KB.
  • AT&T bills for "phantom" data when phones weren't even in use.
  • Tests by the consulting firm indicated that AT&T's billing system did not always record the correct date and time of the data usage, causing transactions to be posted to the wrong billing cycle.

In response, AT&T's spokesperson Mark Siegel has denied the claims in this suit in an email statement:

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. Accurate billing is clearly important and, unfortunately, there have been some incorrect claims about our data usage billing practices.
Particularly for smartphones, tablets and other advanced mobile devices, applications are often constantly running in the background and engaged with our network. And AT&T captures your data activity nightly to create a bill record in our systems. This will appear on your bill to be a late night 'charge,' but in fact, the time stamp reflects the time that your device established a connection to the network, not the time that you sent or received data.

To make matters worst, when AT&T consumers sign their names to receive the latest phone at a reduced price, they also agree to not participate in class action suits against AT&T in the user agreement, as was the case in AT&T Mobility LLC v. Concepcion. (Read Ars Technica's break down of that Supreme Court decision here.) As a result, so no matter how significant this class action lawsuit is for all AT&T iPhone and iPad customers, it may not get as far as the courthouse, and therefore may not set a precedent for future suits. What a shame for consumers.
Data plans are expensive enough that customers should be vigilant about their usage and take AT&T to task when they don't understand their bills, or feel they are being unfairly charged for usage they did not initiate. In my opinion, there should be better education for consumers about how apps and games really work on their phones so they can make an informed decision on their usage before they click. Of course, I doubt telecoms like AT&T would bother because they want people to rack up their data limits to line their own pockets.
Do you monitor your data usage bills from AT&T? Have you noticed any discrepancies?

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[Source: StreetInsider.comMSNBC, Dayton Business Journal]

Topics: Legal, Hardware, iPhone, iPad, Mobility, Smartphones, AT&T

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58 comments
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  • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

    US carriers ripping off consumers? NEVER
    bc3tech
    • Trial lawyers attempting to bilk a corporation? NEVER

      nt
      fr_gough
    • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

      @bc3tech
      The idea that class action lawsuits somehow benefit consumers is the biggest myth in the world. The only people who benefit from class action lawsuits are the lawyers, the lawyers get paychecks worth hundreds of millions of dollars and consumers (many of whom are part of the class action lawsuit without their knowledge or consent) get a coupon for $0.50 a frappuccino.


      You call that justice?
      Doctor Demento
      • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

        @Doctor Demento I agree that the prime INITIAL beneficiaries are certainly the lawyers; most of the time that is. That said, the threat of such lawsuits do indeed act to keep certain abuses at bay. If your personal damages are significant enough you can always opt out of the settlement and file in small claims court using the information generated by the suit as evidence, or even get a lawyer of your own.
        richard233
      • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

        @Doctor Demento
        Nonsense! If you are a part of a class action, you get what is determined by the court, considering how you are impacted. Let's stop this love fest with corporations and badgering of Trial Lawyers. If I have a choice, I'll take the trial lawyers. Can't be even taken to court?? Wonder who dreamed this one up???
        eargasm
      • Brilliant ideas

        @windozefreak

        <i>Can't be even taken to court?? Wonder who dreamed this one up???</i>

        One word: Lawyers
        russdwright@...
  • Never had a problem

    I have unlimited data for AT&T on my iPhone 4. My bill is always the same every month to within 2$. I am not going to nitpick and complain if I get shafted out of 2$ every other month or so.
    Bates_
    • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

      @Bates_

      $2 is a lot. Multiply that with millions of others and that adds up to a lot of millions.
      ScorpioBlue
      • And for a company like AT&T, millions is a rounding

        error.
        fr_gough
      • ZDNet: Fix your damned comment system

        @ frgough
        No it's not.
        But nice corporate apologist rhetoric.
        DeusXMachina
      • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

        @ScorpioBlue
        Correct! This is the problem; not the Trial Lawers. Too many individuals, like this one, sees no problem being ripped off by a corporation, at any cost. Too many say, "Oh well, that is just the way things go. The little guy cannot go up against the big guys. It will cost too much." Then these same individuals will demonize Trial Lawyers for doing their dirty, expensive work. Sometimes I wonder how we made it this far. I will spend everything I own or expect to own, beg, borrow, or steal to keep some sap from ripping me off. Begging this, I will keep my mouth shut, if someone wants to fight that battle for me.
        eargasm
      • It's not just about money

        These lawsuits are <b>also</b> about getting these monopolies to knock it off. Specifically what it is they are being sued about for each particular case.
        ScorpioBlue
    • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

      @Bates_ Don't you remember the bit in Superman 3, as well
      as office space, where even a slight rounding can add up. AT&T have millions of customers using the iPhone so it certainly becomes worth their while to fudge things if they can get away with it.
      richard233
    • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

      @Bates_
      If you havfe unlimited data, why are you getting +$2 overage charges, or do you mean something else.
      neilpost
  • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

    Again I have unlimited data. So I don't get charged anything, but the standard fee. Stop crying.
    timspublic1@...
    • ZDNet: Fix your damned comment system

      @timspublic1@...
      You have unlimited data. Others don't. What is your point?
      DeusXMachina
  • re: no such thing as unlimited data

    This is unacceptable. AT&T can't be allowed to get away with this. What is this "unlimited" plan you speak of? I see only 2gb and 4gb packages for data.

    Who sells true "unlimited" data?
    awkward hug
    • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may not go to trial

      @awkward hug --- AT&T used to have unlimited data plans. They don't as of last year right before the iPhone 4 came out.
      DustinU
      • RE: Lawsuit claiming AT&T is overcharging iPhone and iPad data usage may no

        @DustinU -- OIC. Were those lucky enough to get unlimited plans grandfathered in then?
        awkward hug
    • Unlimited Data Plans

      @awkward hug

      Most providers had unlimited data plans up until recently. So far as I know, Sprint is the only one who still carries it. The only way you can get it anywhere else now is if you are grandfathered in.
      russdwright@...