AT&T Customers Blame Apple for Overcharges

SAN FRANCISCO (CN) - Apple excluded AT&T customers from its iPhone 5 fix, causing them to be overcharged for data use for two years, customers claim in a federal class action.

Apple released its iPhone 5 in September 2012 while embroiled in fierce competition with Samsung, and "was under heavy pressure to deliver a revolutionary new product" to win back market share, lead plaintiff Thomas Palmer says in the Dec. 17 complaint.

The iPhone 5 included the new A6 chip and iOS 6 operating system, which Apple claimed would deliver "lightning-fast" video and Internet. But Palmer says it caused "massive surges in the amount of cellular date" used, piling on fees and penalties for exceeding monthly data use limits.

He claims the problem arose from the way the iPhone 5's graphics processing unit handled audio-video streaming, which caused its Swift CPU to go into sleep mode to conserve battery life. When that happened, Palmer says, the iPhone switched from streaming via Wi-Fi signal to streaming via cellular signal, which increased data use.

Consumers and media noticed the problem almost immediately. Palmer says that within two weeks Apple provided a fix for iPhone 5 owners with Verizon wireless accounts, without announcing it, but did not provide the same fix for AT&T accountholders.

He says AT&T accountholders had to wait for the October 2014 release of Apple's iOS 8.1 operating system for the problem to be fixed.

"Through this entire time period, Apple materially omitted and failed to disclose the defect to consumers," Palmer claims. "By omitting this material information, consumers were charged hefty fees for data they did not intend to use and had sought not to use, because they had initiated the connections through their Wi-Fi networks to avoid such charges."

Though Apple provided a fix for Verizon users, Palmer says, AT&T subscribers had to contact the service provider and ask for a refund each time they incurred additional charges.

He seeks class certification, restitution and damages for false advertising, unfair competition and California law violations, for all AT&T wireless subscribers who bought Apple devices running iOS 6 or 7 or iOS 8.0 during the previous four years.

Apple did not return phone call and email requests for comment on Friday.

Plaintiffs' attorney Jeff Friedman, with Hagens Berman Sobol Shapiro in Berkeley, did not return a phone call seeking additional information Friday.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit