Is AT&T Overcharging iPhone and iPad Data Users 300%? [Updated]

By Matt Peckham on May 19, 2011

If you're an AT&T iPad or iPhone user, you'll want to double-check your statement, because AT&T may be charging too much for monthly mobile data usage. In fact a new class action lawsuit ostensibly backed by extensive research alleges that's exactly what AT&T's been up to.

Ask AT&T and they'll tell you the charges are “without merit,” but ask a lawyer in the lawsuit targeting the mega-telecom (as MSNBC did) and they'll tell you AT&T's been bilking its customers by using fraudulent data metrics.

MSNBC reports that lawyers said they spent $80,000 and employed an independent computer firm to test various mobiles with different carriers over several months. The results? The lawyers claim that when it comes to iPads and iPhones, AT&T “systematically overstated the amount of data used on virtually every transaction.”

A lawyer in the case told MSNBC that AT&T's methods were comparable to “a rigged gas pump,” where you pay for a gallon of gas but only receive nine-tenths. The lawyers claim the rigging isn't sporadic, either, and that they found AT&T was overcharging on each transaction. In fact they're alleging AT&T engages in “phantom” transactions: a test engineer let an iPhone sit untouched (on, with data-using apps disabled) for 10 days, but when he got the bill, it reportedly included charges for 35 separate transactions.

How much overcharging are we talking here? Routinely 7 to 14%, claim the lawyers, but sometimes as much as 300%. The cost to customers may be a relatively small $10 to $15 a month, but with AT&T's 20 million-strong iPhone and iPad user base, you're looking at millions of dollars in alleged overcharges.

What's really going on? It's hard to say without access to the test data, but I'd wager a lot of this boils down to auto-updates "hidden" from users. And in the “10 days” iPhone scenario, the question's whether the test engineer truly disabled everything, including app “notifications” and “push” data, enabled by default in the settings menu.

Right or wrong, true or false, it'd be nice to see a new iOS feature come out of this: an easy to find "all data" kill-switch that doesn't require powering the phone off. Also: an app-data screen that would illustrate each and every data transaction, so you knew precisely where (and how) to plug each data "leak."

[Update: AT&T's released a statement reacting to the overcharging allegations:]