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AT&T Sued For Systematic iPhone Overbilling

Hugh Pickens writes writes "UPI reports that AT&T is facing a lawsuit that says AT&T routinely bills for 7 percent to 14 percent more data transactions than normally take place, which could blossom into a costly class-action case. Court papers claim that attorneys set up a test account for an iPhone, then closed all of its apps and left the device unused for 10 days. AT&T still billed the account for 2,292 KB of usage. 'A significant portion of the data revenues were inflated by AT&T's rigged billing system for data transactions,' say court papers filed on behalf of AT&T customer Patrick Hendricks. 'This is like the rigged gas pump charging you when you never even pulled your car into the station.' Attorneys say they would file to have the case moved to class-action status, which makes the outcome relevant to all of AT&T's iPhone accounts."

37 of 265 comments (clear)

  1. AT&T's Fault? by Kneo24 · · Score: 4, Insightful

    Nothing in the article shows how it couldn't have been the phone itself doing it, not AT&T doing it. If the device is ON, but not being used, well, there's a lot of shit that goes on in the back-end of things, like update checking, etc...

    1. Re:AT&T's Fault? by nhstar · · Score: 4, Insightful

      Agreed. It would be interesting to know if they ran the same test with the data service actually turned off on the phone. Then I'd start to see fault with the carrier.

      --
      --- no sig to see here... move along.
    2. Re:AT&T's Fault? by Gaygirlie · · Score: 3, Interesting

      The article indeed doesn't give much information, but it does say they disabled a bunch of running services on the phone, and left it unattended for only 10 days. 10 days, with no apps on and no user interaction is simply too little to rack up 3 megabytes of data. As a reference point I don't own an iPhone so I don't know how relevant it is, but my N900 only racks up about 25kb-100kb a day at max if I turn off mail-checking, even less if I disable automatic updates. As such I can't help but feel the 3MB of data for 10 days is indeed inflated.

    3. Re:AT&T's Fault? by Kneo24 · · Score: 2

      I don't get the attitude around here. When Microsoft's latest phone had unexplained data usage, no one blamed the carrier, they blamed the people who designed the phone -- Microsoft. Now I'm not going to fully disagree with you here. I think the carrier should assume some responsibility, but to what extent it's their responsibility, I'm not sure.

    4. Re:AT&T's Fault? by halcyon1234 · · Score: 3, Insightful

      Not that people need proof or anything to sue these days, but...

      1. I would have had (at least) one phone with it's battery out (or dead, or both)
      2. Another phone with all it's services turned off, and the phone turned off.
      3. Another phone with all it's services turned off, and the phone left on
      4. Another with it's services on, and the phone off
      5. Another with it's services on, and the phone on

      I would then take a second group of all the above phones, and a few times a day, send them a phone call (unanswered) and a text message (unread).

      (For the sake of cost efficiency, you could use just one phone in all the above states, it'd just take longer)

      Ideally, the phones that are off or dead should have no consumption, those that are on or have services running should have more. There's a non-zero chance the off-but-not-dead are in a "vampire" state, and will still draw a trickle of data.

    5. Re:AT&T's Fault? by dkleinsc · · Score: 4, Interesting

      So your argument is that if AT&T builds in an app that checks with AT&T for updates, and can't be disabled, AT&T should be able to bill customers for the privilege of having that update checker? Because the phone in question was running no applications whatsoever.

      The obligatory car analogy: Do you think it would be ok for automakers to charge customers for the privilege of replacing recalled parts? (especially considering the Fight Club math of cost of recall >= probability of failure * units sold * average court settlement)

      --
      I am officially gone from /. Long live http://www.soylentnews.com/
    6. Re:AT&T's Fault? by Anonymous Coward · · Score: 3, Informative

      > If they would of have

      Would HAVE. HAVE.

      Please, think logically about your language before distorting it through laziness.

    7. Re:AT&T's Fault? by daniorerio · · Score: 4, Insightful

      Maybe they did, but the phones turned off didn't get billed so they're not mentioned?

      From the provider's point of view it is pretty easy to determine if a phone was actually on or not, so if you're going to overbill it's probably wise to overbill phones that were actually turned on...

    8. Re:AT&T's Fault? by Anonymous Coward · · Score: 3, Informative

      No, the problem was Yahoo! Mail. Read article here: http://www.engadget.com/2011/02/01/windows-phone-7-phantom-data-leaker-unmasked-as-yahoo-mail-fi/

    9. Re:AT&T's Fault? by oreaq · · Score: 2

      TFA is light on details but the court filing states that all push notifications, e-mail checking etc. were turned off on the iPhone.

    10. Re:AT&T's Fault? by pthisis · · Score: 2

      I don't understand why any phone should be sending data (and wasting customers' money).

      It shouldn't be wasting customer's money; the iPhone was designed to be used only with unlimited data plans (precisely so that Apple could have it do all kinds of "user-friendly" junk in the background without the customer paying for it), and for years after it was introduced you were required to have such a plan with it. AT&T moved that rug out from under it a year ago or so.

      --
      rage, rage against the dying of the light
    11. Re:AT&T's Fault? by Anonymous Coward · · Score: 2, Insightful

      The article indeed doesn't give much information ... my N900 only racks up about 25kb-100kb a day at max if I turn off mail-checking ... As such I can't help but feel the 3MB of data for 10 days is indeed inflated.

      People like you are the problem with western society today.

      You purport strong conclusions based on nothing but your incidental personal anecdotes and "feelings". Assuming your example is even correct at all, you state that your phone uses up to 100 KB/day without mail checking enabled. That is approximately 1 MB over a 10 day period, or about half of what the lawsuit claims the AT&T iPhone used.

      Any number of things could account for the iPhone using twice as much data for similar operations. Perhaps Apple uses an inefficient data serialization mechanism to transmit requests and responses over the network for update checking. Maybe it checks for updates twice as often. Maybe the fact that visual voicemail uses data plays a role.

      Point is that maybe from your uninformed point of view it makes sense that you should "feel" like 2 MB is too much (as the article states 2 MB, not 3 MB), but I highly doubt that you could back that up with real data that would stand up to peer review.

      A wise man once said "assume ignorance not malice".

      I should add that underworked attorneys are filing BS lawsuits like this all across the country in a desperate attempt to generate some cash. The cases are often dismissed and if not they rarely if ever go to trial. The pleadings and early motions are expressly designed by the plaintiffs to generate a quick cash settlement from the defendant to avoid the extremely expensive e-discovery procedures, and the damaging process of establishing a national class.

    12. Re:AT&T's Fault? by Anonymous Coward · · Score: 5, Insightful

      People like you are the problem with western society today.

      You purport strong conclusions based on nothing but your incidental personal anecdotes and "feelings".

      How do you not see the irony there?

    13. Re:AT&T's Fault? by scubamage · · Score: 2

      I disagree that this is a BS lawsuit. If the user is not interacting with the phone at all, and the user is getting billed purely because of data that the phone is using in the background (not due to user interaction) AT&T should be aware of this. Even if its administrative overhead, the fact is the user isn't generating it and so they shouldn't be billed for it. If they are going to be billed, there should be a disclosure at purchase time stating "this phone will generate X bytes of data every N minutes even without user interaction, so be prepared to see that on your bill."

    14. Re:AT&T's Fault? by AmberBlackCat · · Score: 4, Interesting

      I can't find my previous post to link to it so I'll have to repeat myself. My last sprint phone would charge us for data if I used the mp3 player. And it would do this even if I had the internet capability turned off. If you use the web browser, it asks if you want to turn the internet back on in order to continue. If you play an mp3, it turns the internet on and starts charging by the minute with no warning, even though you're just playing a file on a memory card. To make things worse, external contact with the phone could launch the music player. I guess one of the external buttons was a music button.

    15. Re:AT&T's Fault? by satch89450 · · Score: 2

      Here's an idea: If you have a problem with paying for "background" data, how about you trade your toy phone for a phone that *doesn't* use tons of data in the background?

      Here's an idea: the phone vendor discloses the amount of "background" data the phone will send, and the charge that will be applied to that "background" data. That way, if the background charges are disclosed, I can make an intelligent choice based on the disclosures.

      All this reminds me of the situation with shrinkwrap licenses, especially the ones you can't see until you open the box...and here is the Catch-22: "Breaking the shrinkwrap indicates your acceptance of this license." If the background transmission is required for proper operation of the phone, that data transmission cost should be built into the monthly billing, not tacked on as an uncontrollable "extra charge". AT&T can predict the overhead, because they and Apple know what's running on the phone when you shut every app off. That test with the no-app phone, by the attornies, shows the problem quite well.

    16. Re:AT&T's Fault? by I8TheWorm · · Score: 2

      You're right. Everything on the phone is an app including the phone (which *shouldn't* use data).

      Phone, contacts, the "killswitch", GPS if you allow cell tower helpers, etc..

      Had the testers actually turned off data services rather than shut down some apps, we'd have a better picture of what was really going on. As simple a test as that would be, I'm led to believe they chose a different route on purpose.

      Spot on with your WP7 comparison too.

      --
      Saying Android is a family of phones is akin to saying Linux is a family of PCs.
    17. Re:AT&T's Fault? by smart_ass · · Score: 2

      How about put it in FLIGHT mode.
      Isn't supposed to be transmitting / receiving anything.

      Then contact AT&T ... if they blame Apple, tell them to report Apple to FAA ... they would be interested.

      --
      Ouch ... did I just say that.
    18. Re:AT&T's Fault? by Chris+Pimlott · · Score: 2

      WTF?

      I understand what you're talking about but I have no idea why you choose to go off on this poor guy. He stated his opinion, made it clear it was only his opinion and backed it up with some the reasoning behind his statement. He in no way claimed to be absolutely right; in fact, he even pointed out a reason why he might be wrong. Perhaps he was a bit foolish to assume similarities between iPhone and N900 but one is free to draw that conclusion thanks to the information he provided.

      In short, he offered a reasonable and fairly modest observation along with enough support to allow the reader to make their own judgement on whether to accept it.

      This guy is not your enemy.

    19. Re:AT&T's Fault? by mcrbids · · Score: 3, Interesting

      Nothing in the article shows how it couldn't have been the phone itself doing it, not AT&T doing it.

      I'm guessing you haven't done much business with AT&T? Because this is AT&T that we're talking about. Making up random crap to put on the invoice and then sending you to collections seems to me to be what they're all about!

      My daughter was a foreign exchange student in Germany. I signed up for an international calling plan ($5/month, $0.10/min) before calling her. AT&T was nice enough to charge me the $5/month, and then $4.00 per minute, making my $90 bill closer to $4,000.000. (Yes, that's right!) I spent HOURS on the phone with their support reps, with names like "Mike" and "Sally" with barely comprehensible Indian accents and horrid call quality, none of whom seemed able to do anything at all to correct the bill.

      After 4 months of angry-looking bills and threats to send to collections, I called AT&T and threatened to quit their service. Guess what? I ended up talking to somebody named "Sally" with an AMERICAN accent who corrected the $4,000 bill in 10 minutes! Thinking balance had been restored to the Universe, I decided to leave it be.

      The next month, they overcharged me $20. If you've read this far, you're probably thinking: "Oh, this guy just had a bad experience... this isn't usual"..

      There's more!

      A few months after all this, my son wanted an iPhone and wanted me to co-sign. So I showed up at the AT&T store to find out that their "co-sign" is better read as "it's my contract". Smarting from the previous experience, I refused to sign, and left the store.

      A year later, they sent me to collections for $150 for breach of contract. AT&T sent me to collections for a contract I never even signed. It took another two hours and 6 call transfers to clear this up.

      Do you think I *ever* want to do business with AT&T?

      --
      I have no problem with your religion until you decide it's reason to deprive others of the truth.
  2. Was the real data transfer amount zero, then? by heneon · · Score: 2

    Tfa didnt say how much data was transferred during that period (or was that 2 megs pulled totally from the hat). Not having ever used an iPhone I suppose there is some sort of a counter you can reset to see how much data is transferred. Is the all apps off supposed to stop all activity or is there still some background programs accessing the data network occasionally?

  3. Assisted GPS ? by Pascal+Sartoretti · · Score: 2

    It uses data trafic.

    BTW I assume that they had turned off e-mail checking, of course.

  4. AT&T's Response by eldavojohn · · Score: 3, Informative

    you have RTFA

    Well, via Apple Insider I found a more complete detailed account with AT&T's response:

    "Transparent and accurate billing is a top priority for AT&T," an AT&T representative has responded, speaking with MacNN. "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."

    It is odd that it seems to only be reported by iPhone and iPad users.

    --
    My work here is dung.
  5. B.S. by Anonymous Coward · · Score: 2, Funny

    I'm calling B.S. I had an AT&T iphone, and even with full bars and every internet app open it takes WAAAAY longer than 10 days to download 2,292 KB on their network.

    -Inigo Carmine

  6. More info and PDF by EuclideanSilence · · Score: 4, Informative

    Slightly more informative article with a link to a PDF of the complaint: http://www.pcworld.com/article/218381/atandt_accused_of_overbilling_iphone_ipad_users.html

  7. Accident or intentional? by h00manist · · Score: 2, Informative

    AT&T is Apple's partner and should be fully aware this happens. If it's a technical issue, there should be warnings and workaround, preventive measures. There is little info on how to prevent extra charges on the phones, for obvious reasons. I've also noticed many phones make it rather easy to accidentally dial numbers.

    --
    Build your own energy sources from scratch. http://otherpower.com/
    1. Re:Accident or intentional? by Eraesr · · Score: 3, Insightful

      I've also noticed many phones make it rather easy to accidentally dial numbers.

      Oh yeah they totally do this on purpose

    2. Re:Accident or intentional? by commodore6502 · · Score: 2

      On the other hand, ATT could claim they are not responsible for Phones sending data, and the user should have checked into that prior to signing-up. Just like the old Dialup ISPs said they are not responsible for long-distance charges incurred.

      Reminds me of this story - Verizon Can't Do Math - The operator quoted "point zero zero two cents per kilobyte" * 35,500 KB == 71 cents
      Verizon charged 71 dollars.
      http://verizonmath.blogspot.com/2006/12/verizon-doesnt-know-dollars-from-cents.html

      --
      Information wants to be expensive AND wants to be free. So you have Value vs. Cheap distribution fighting each other.
    3. Re:Accident or intentional? by Dexy · · Score: 2

      The easiest way to do a 100% foolproof test is leave an iPhone turned in in Airplane Mode. At least then you can definitely eliminate the possibility of looking for updates/mail/"rogue" data (I'm looking at you, Yahoo Mail on Windows Phone)

    4. Re:Accident or intentional? by Jay+L · · Score: 2

      I've also noticed many phones make it rather easy to accidentally dial numbers.

      You should see landlines - they don't even require an "OK" or "call" button. Total scam.

  8. More "newsyle" fuckup by halcyon1234 · · Score: 3, Informative

    Slashdot: Stop fucking around with basic HTML elements! The above has an OL in it.  Okay, all you user style people, time for another entry in the "red pen" edition of Slashdot css:

    .commentBody ul, .commentBody ul li
    {
      list-style: circle !important;
      margin-left:25px !important;
    }

    .commentBody ol, .commentBody ol li
    {
      list-style: decimal !important;
      margin-left:25px !important;
    }

    1. Re:More "newsyle" fuckup by popo · · Score: 3, Informative

      Uh.. the OL seems to be working for me. I'm using FF 3.6

      --
      ------ The best brain training is now totally free : )
    2. Re:More "newsyle" fuckup by halcyon1234 · · Score: 2

      FF 3.6.13, using D1 discussion system. Both UL and OL are set to list-style: none.

  9. Same thing happened to me. by Anonymous Coward · · Score: 3, Interesting

    I know this is about the iPhone but since I have my iPad data plan with AT&T... I had issues with my iPad. I had it turned OFF one weekend. I turned it back on and within 5 minutes I received an email saying my data plan had maxed out after 2 1/2 weeks into the plan (250MB). So I renewed the plan mid month. I wasn't sure what in the world I could have done to cause this as it'd never happened before. I only have two pages of apps, none had notifications turned on, none had 'allow location' , etc. My email was manual only when I'm in mail. I use the iPad when I'm at work to check email once or twice a day and I am sometimes on Yahoo IM. But rarely. I don't stream vids or play online games, etc. Other than that I use the iPad as an ereader and for Pages. No reason at all to cause such data usage. 2 weeks later I'm told my data is out AGAIN. I do a complete reset of the iPad and within 5 days, I received 4 consecutive emails within an hour, one said my data plan had only 20 MB left, one said 18, one said less than 10 and one said out of data. I called AT&T and they suggested I upgrade to the 2GB plan. I said that I had no new apps on the iPad, had done a complete reset, am doing nothing more than I've done with it since May, so there's NO reason for it to all of a sudden suck so much data. We checked notifications, we checked location services, email and could find nothing to cause this. We even called Apple Care. No one could find a reason. And LO! after my complaint to AT&T, I haven't had that problem again even though it's been almost 6 weeks. Even though we changed none of my settings, as they were already turned off. I find that a bit suspect. To their credit, AT&T was gracious enough to give me one month's free iPad and iPhone services 'for my troubles', which was rather decent of them as the gent on the phone heard how irate I was becoming.

  10. Lawyers upset by over-billing? by scrib · · Score: 4, Funny

    Wait a minute, lawyers are upset about systematic over-billing?

    I'd say this is a "the pot calling the kettle black" moment, but it's more like "tar calling granite black."

    I have no doubt that the lawyers will bill AT&T for every minute of those 10 days they "monitored" that iPhone...

    --
    Help! Help! I'm being repressed!
  11. Re:Can't wait to see the settlement by SecurityGuy · · Score: 3, Insightful

    Damn straight we complain. Class actions are a scam. The parties harmed by the action get a pittance while the lawyers get a metric ton of cash. You might look at it not as outrage that lawyers get paid for their work, but outrage that this action is being taken on behalf of us poor iPhone owners. It's being taken by lawyers for lawyers.

  12. Lag time by joeyblades · · Score: 3, Interesting

    If you read the actual complaint there are three claims. One of them is that data services were charged for were data not requested and that seems to be the one that everyone is focused on. Maybe there's background services, maybe not. However, a better explanation is actually that there is only one issue - the last one in the complaint. This complaint is that charges are not always applied at the same time that the usage occurs. I know that this one is true - I've witnessed it myself, was penalized for it, then AT&T forgave the penalty (more on that in a second).

    This billing lag could easily explain why data charges were incurred during a period of time when the phone was supposedly inactive.

    My daughter recently got an iPhone with the 200MB plan. We were monitoring her data usage regularly and towards the end of the billing cycle we saw that she would go over if she continued with the same consumption. So she stopped using the data apps... she went over anyway and we were billed for $30 instead of the $15 we had budgeted for. After my daughter swore that she had not used the web in the last week, I called AT&T to find out what the deal was. I was finally able to confirm with a tech that indeed, some data activity might not be billed for days after the usage. He told me that he could confirm that my daughter had actually exceeded her limit a day or so before she ceased activity. AT&T was kind enough to drop the extra $15 since their tool had misguided us. I checked and as far as I can tell, AT&T makes no claims as to whether billing for services rendered occurs at the time of rendering.