After he received an extra charge on his cell phone bill, AT&T customer Patrick Hendricks began to suspect that something was not right. Hendricks was a subscriber of AT&T's low-end data plan, paying $15 per month for 200 MB of data usage on his iPhone, which he says he never surpassed. However, in one of his monthly bills, he was charged an extra $15 for 23 MB of data plan use above his 200 MB allotment. Hendricks began an investigation into AT&T, hiring an independent consulting firm to assist him, and ultimately filing a class action breach of contract lawsuit against the company, claiming that it regularly and intentionally overcharged users in order to make additional profits.

According to the lawsuit, the consulting firm hired by Hendricks found that AT&T's bills "systematically overstate web server traffic by 7 percent to 14 percent" for iPhone and iPad users. In some cases, it was found that web traffic was overstated by as much as 300 percent.

In addition, the California business litigation alleges that the company "bills for phantom data traffic when there is no actual data use initiated by the customer". The suit cites an experiment performed by the consulting firm in which a brand new iPhone had all notifications, applications, and location services disabled, and no e-mail account configured. After 10 days, the phone was found to have used 2,292 KB of data despite the fact that it was not used at all during that period.

AT&T has denied the allegations as a whole. "We intend to defend ourselves vigorously," said a company spokesman. "Transparent and accurate billing is a top priority for AT&T."

The charges filed against the company in the class action suit include breach of contract, unjust enrichment, and unlawful, unfair and fraudulent business practices in violation of the Unfair Competition Law in the California Business and Professions Code.

Source: Apple Inside, "Lawsuit accuses AT&T of overcharging iPhone, iPad customer data use", Katie Marsal, 1 February 2011