iPad and iPhone Users Sue AT&T for Overbilling Customers

Small phone, huge bill

​iPad and iPhone users might want to take a quick look at their phone bills -- they could be getting ripped off.

In a class action lawsuit filed last week in San Francisco, millions of iPad and iPhone users are suing AT&T for overbilling customers and overstating web traffic by as much as 14 percent and in some cases more than 300 percent. This means users are paying for more service than they used or service they never used at all.

So if a iPhone user downloaded a 50 KB Web site, AT&T would overstate the traffic as 53.5 KB, according to the lawsuit.

In addition, plaintiff Patrick Hendricks, who is representing the class in the lawsuit, claims that the company is also billing for "phantom traffic," which means AT&T is claiming a customer is downloading data when in fact they are not. 

"AT&T's billing system for iPhone and iPad data transactions is like a rigged gas pump that charges for a full gallon when it pumps only nine-tenths of a gallon into your car's tank," the lawsuit states.

An independent consulting firm retained by the plaintiff, discovered the overbilling. The extra charges have "a modest effect" on customers' bills, yet give the company's bottom line a huge boost, the lawsuit says.

The consultants discovered this when they conducted an experiment. They bought a iPhone from an AT&T store, disabled services, made sure there was no e-mail account configured, and closed all the applications, and let the phone sit unused for 10 days.

During that time, AT&T billed the phone's account for 35 transactions, which is like "the rigged gas pump charging you when you never even pulled your car into the station," according to the complaint.

AT&T has 92.8 million customers and reported an increase of more than $1.1 billion in wireless data revenues in the fourth quarter of 2010. A major portion of that increase was due to the "rigged" billing system, the claim states.

Previously, AT&T has been sued for charging customers for downloads they never made and it reneged on billing plans while charging customers for services it never delivered, according to the lawsuit.

Hat tip: Courthouse News Service

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