Just three weeks after Verizonannounced that it will carry the iPhone beginning in February, AT&T is dealt another blow as it faces a class action alleging that the carrier’s bills “systematically overstate the amount of data used on each data transaction involving an iPhone or iPad account,” and charge consumers for “phantom data traffic” that never existed in the first place.

The suit, filed in San Francisco, alleges that AT&T charges consumers for data transactions even if they disable their phones entirely. It compares the billing system to a “rigged gas pump charging you when you never even pulled your car into the station.”

Phantom data use

It is notoriously difficult to measure the amount of data a person uses in a single session. But lead plaintiff Patrick Hendricks got around the standard obstacles by hiring an independent consulting firm to manipulate the phone so that it didn’t receive any data at all. The firm turned off the phone, ensured that no applications or e-mail accounts were running, and then left it off for a full ten days.

When Hendricks received his bill, it showed that 2,292 kilobytes of data had been used during the subject period -- the equivalent of over 35 transactions.  

Overcharges for actual data use

The complaint also says that, for transactions which actually do take place, the carrier charges too much. According to the complaint, web traffic was typically overstated by between seven and 14 percent, although sometimes that figure reached as high as a whopping 300 percent.

“So, for example,” the complaint explains, “if an iPhone user downloads a 50 KB website, AT&T’s bill would typically overstate the traffic as 53.5 KB (a 7% overcharge) to as high as 150 KB (a 300% overcharge).”

Small overcharges add up

Although the overcharges have only a “modest effect” on a single consumer, they could make up a “significant portion” of AT&T’s data-derived revenue, the suit alleges.

“A customer cheated by a rigged gas pump may not notice the small fractions of a gallon missing from his tank,” the suit points out, “but the station owner can boost his revenues by repeating the trick again and again to overcharge a large number of customers by a little bit apiece. The same is true with respect to AT&T’s rigged data billings.”

The suit alleges breach of contract, unjust enrichment, and violation of California’s Unfair Competition Law. Hendricks is seeking compensatory and punitive damages, and an injunction preventing AT&T from continuing to overcharge consumers.

The suit is one of the few iPhone-related pieces of litigation that doesn’t target Apple itself. AT&T Mobility, LLC is the sole named defendant.