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AT&T Mobility And RadioShack Hit With Class Action Lawsuit Over $5,000 Overage Bill

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A woman in Oklahoma bought a 3G netbook from RadioShack for $100, subsidized by a two-year data plan from AT&T Mobility. That plan comes with a 5GB monthly data cap, which she exceeded, and as a result her first monthly bill was over $5,000. Now the two companies are facing a class action lawsuit that alleges they are not clearly disclosing to purchasers that overage fees could be "astronomical."

We don't know any more details about the woman's story, but the $60/mo DataConnect plan offered directly from AT&T Mobility has a similar 5GB limit, and every GB over that bills at $480. If that's a reliable model, then we can assume this woman must have gone over her monthly limit by 9 or 10 GB.

And if that's the case, then WHAT THE HELL was she using her netbook for? Certainly not email or general web browsing—maybe bittorrent downloads, or streaming TV and movies. And if that's the case, then we're wondering just what kind of explanation was given by the RadioShack rep who sold the package. At $480 per GB overage, you certainly should be warned to be mindful of your data usage—but then that begs the question of why AT&T Mobility wouldn't contact her as soon as she exceeded her 5GB limit, or disable access since she's a new customer who might not understand the intricacies of overage billing.

Anyway, the lawsuit specifically accuses RadioShack and AT&T Mobility of:

...common law fraud and violation of state consumer protection acts in connection with allegedly false, misleading and inaccurate advertising of the netbook DataConnect plan.

"AT&T Mobility, RadioShack hit with 3G netbook class-action lawsuit" [RCR Wireless]

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127
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Mikestan
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3G Netbooks + Torrents= Bad idea

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Somebody obviously misled her in the sales process. If you had any clue about how download limits work and what that effectively means for P2P stuff, you wouldn't have agreed to Satan's data plan.

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If the 5gb cap is disclosed in the contract, then she has no legs on this one. And as with the $26+K bill for the guy and the cruse ship, AT&T said they send text messages. This is a fail on AT&T's part because Netbooks and data connect cards can't receive SMS.

I still have to say, why is it AT&T's fault for telling the customer what they are doing? I believe the software that gets installed on your PC shows transfer amounts at the top of your screen.

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This woman is on crack.How the hell can you run up a $5000 overage ,and have the gross irresponsibility to blame the seller for it?That's like me getting a ticket for 50 over ,then suing GM for making a car capable of 100 MPH.


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Do they provide a way to measure your usage, real time?

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I hate to break it to the staff writing, but 5gb over the course of a month isnt very much at all... Just 166mb per day.. or 20mb per hour in an 8 hour day.. maybe she uses it for work? Vpn? Who knows..


Since it was a new Netbook, odds are there are a bevy of Drivers and Updates that will stream to the machine over the course of the first month. Any software package downloads are going to hit her too.


A small ammount of time on Youtube, a net radio station, or heaven forbid, netflix would easily overwhelm the connection.

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The only @Mikestan:

The only way I can see this woman using torrents is if she had someone set up a client software like Vuze or something for her, and she got into watching and downloading a lot of crap. But barring that, if she didn't really ask the right questions or whatever when she bought the netbook, I doubt she is savvy enough to be into downloading movies or torrents otherwise.

Besides, what kind of 3G speeds is she getting if she's able to download torrents at any decent speed? Even with my wi-fi connection, I sometimes cringe at how long it takes to download sizable torrents.

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It would be nice if they were forced by law to disclose how much a variety of data usages would cost in a given month, I mean in addition to the original 5GB/Month plan. They wouldn't sell any if the plan read something like this: 5GB only $60! 6GB Only $540! 10GB only $2460!

There is no reason for AT&T to charge that much for their service. If they don't want people going over a certain limit because of bandwidth limitations, then they should cut people off. But then again, it's more lucrative this way.

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Let me see if I can do the math here: On the AT&T wireless site is says $0.00048/KB when over 5 gig (It says that clearly, I might add). So that is about $500 per gig over. So she went over by 10 gigs!!? WoW

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It's amazing that these stories seem to pop up all the time. I can't imagine how many instances that happen that don't get picked up by the media. It's pretty clear to see that these companies lie in wait for naive customers to trot unsuspectingly past their allotted amount. I would blame the consumer for looking at their contract close enough, but I seem to read about similar stories often enough to suspect that maybe the companies probably go out of their way to "downplay" that important part of the contract.

I hope that some future legislation forces these companies to have the consumer opt in to a status alert when they approach 90% of an agreed spending limit. (whatever happened to those? I used to get them before, but not in some years now)

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@Joewithay: Ahh crap you already did the math in the post. My bad

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It's true that 5GB is not that much. I myself rack up about 3GB a month just doing Windows Updates and my weekly Adobe Reader and Java upgrades.

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I'm wondering if Billie was deliberately mislead or if she just failed to read the contract. I find it hard to believe that ATT wouldn't include information concerning the 5gb cap and overages in any of the paperwork.

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I sell these at Radioshack,so allow me to clear the air a bit.


The data cap is disclosed in the contract you sign in the store.Since its a part of the agreement to get the aircard in the first place,its her basic responsibilty to read before she signs.


The netbook in question is an Acer that runs XP,with data handled via an ATT connection client.The client will tell you to the KB exactly what data you have transmitted that session,as well as lifetime transfer info.Without the client window being open there can be no active ATT connection.

To add,maybe its just common sense to not download terabits of data on a laptop with 250 GB of hard disk space.To exceed the cap the way this lady has,she had to be doing something shady-unless she was slingboxing 24-7 over the 30 day billing period.


This is a fraud on her part-shes wasting time when there are honest cases of corporate fraud happening right and left.And did she inform the sales associate that shed be downloading hundreds of gigs of data a month?

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@mrdeeno: Umm, wifi isn't an internet connection. It's a connection to a network. How fast your network is connected to the internet dictates how fast your "wifi" is at downloading torrents. If you have your wireless router hooked up to dsl thats 768k down, it's still going to be slow.

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@pmcpa2: Contracts have been made moot previously in court cases due to the average person not being able to understand the legal terms used within.

Likewise, if anyone remembers, AT&T did advertise their service as Unlimited.

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@mrdeeno: Don't think you need to be savvy to DL torrents. It's so easy, even Grandmas can do it.

Not a bad slogan. Maybe I'll pitch that to TPB.

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@Silversmok3: Did you read the article. The lawsuit says "neither plaintiff nor other consumers were informed, nor could they have reasonable discerned from the paper work that wireless Internet usage exceeding 5GB per month would result in astronomical charges running into the thousands of dollars." This is not like suing GM for a speeding ticket. Unless GM sent you a separate ticket for $20,000 because you drove their vehicle too fast.

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@Silversmok3: Ummm Yea? ... that comparison doesn't make much sense... More like the lady leasing a car and the dealership and car maker not properly disclosing how many miles she can drive on it... and then grossly over-billing her when she goes over her limit.

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@Silversmok3: Why does your math not match the math of the people above? Some have calculated that the overage is around 10 GB. You are saying it had to be an astronomical amount to achieve her bill.
So if you are the guy selling these things, what are you telling your customers?

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@OMAC: My satellite internet does that. If you go over your monthly allotment, it'll sloooowwww yyyyoouuu down. I've never come close but I've heard of the horror from my father.


It's a pretty effective tool. He's getting verizon DSL.

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@Joewithay: It's nice that you put the actual charges up. Thanks. I'm sorry but most people look at $0.00048 and think that is a low number. That is a very deceiving. It would be like charging people by the nanometer.

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@Joewithay: That's deceit in itself, in my mind. Not many people understand the difference between a kilobyte, megabyte, or a gigabyte. Some people just want internet and the sales person says "Oh, there's no way you'll go over 5 gigs!"

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How could this happen?

She must have terrific coverage. I mean what does 3G do for speed? I could see if she went home and went via Wi-Fi or or ethernet to d/l that much in a month...

Ohhh.. I think I know what happened.

Perhaps she was d/l'ing things at home through her 3G instead of her broadband (wired/wireless) connection... Ok, that I can see.

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The point is that failing to read a contract should not result in a $5000 penalty-- if these companies are going to charge fees like this there should be a dinger that goes off and a big pop up box that says WARNING: YOU HAVE EXCEEDED USAGE, YOU ARE BEING CHARGED...


Better yet- law should be they can't charge you more than the price of the plan would have been that would have allowed such usage-- so $200 instead of $5000- much more reasonable.

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5GB per month is not much. If she was doing 200Gb a month maybe I would get on board with these accusations of doing something shady...but 5GB? I probably came close to using 5GB a month of data in the days of dial-up.Sure it would be fine for light web browsing/e-mail/etc. But moderate to heavy use could peg 5GB with no problems, and doing nothing shady.

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@RonDiaz: Forgot to mention, I agree, real poor staff writing on this one.

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@Silversmok3: This is why you don't buy anything at RadioShack. First. She should have been able to download a Terabit of information since that only equals around 100 Gigabytes. Second she downloaded less than one twentieth of the amount of data you are saying she shouldn't have downloaded. You could easily download the amount of data she did if she streams HD video from Hulu or Netflix. 250GB is plenty of space for most people.

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@RonDiaz: No where in the post did they hint that she was doing anything shady.

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@failurate: before i actually sell these things i ask em what they're using it for. i let them know that gaming, slingbox, etc will KILL the 5 gb cap easily. it states on the contract a 5 gb limit each month with the overage rate stated. a little over a yr ago it was unlimited, but they decided taht since only ~3% of users exceeded 5 GB they will cap it at that. if you had an unltd plan it states in the fine print that if you go over they have the right to cancel your service at any time.

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Full disclosure: I used to work for RadioShack, where I my job description was basically "whore these cell phones and data plans, oh yeah, guys might come in here asking about TVs and cables and parts and crap, they're over there in the back of the store".


I cannot speak for everyone at Radioshack, because they are commissioned sales people. With any commisioned position, there is quite a bit of room for sleeze bags, but also quite a bit of room for really good people who are passionate about technology. So, while I was sure to mention and detail overage charges for data plans, some may not have been, since cell phone sales/data plans are usually the bulk of a person's salary.


However, if they were not told by the sales person, the documents that were signed are honestly pretty vague, and tell you more about the phones features than the details of the contract. I often wondered how it can possibly legally bind you to an agreement, as there are very very few contract details presented.

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Thats one thing i love about my data plan

1. i get a text message from my provider at 80% of my wireless data limit

2. I get a second message at 100% of my monthly data limit.

so if i go over its totally my fault for being stupid

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unless it was a hand written contract, it will state for her the limit and overage rate. only around 3% of people actually exceed 5 GB/mth. after selling these things for a while, i've only seen one person have an insane bill. the kid was plugging it into his xbox and he had almost a $5 k bill. he sucked it up and paid it, since it states it in your contract and we make sure not to sell them without telling them what NOT to use it for.

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@verucalise: Yeah it would be better to put it into $/MB or $/GB so the customer would have a better idea. So I do agree, it is a bit deceptive by AT&T.

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Its pretty well known by people that work in ATT customer support that there are tons of accounts that exceed the 5g limit and they are not contacted in any way. this is corporate thievery. although credits are given as a common practice, they know that many of those 2k+ overages are getting paid. I was a mobility call center manager and I can say without question that between the errors on accounts and sales reps that are misleading so they can get their quotas and not get fired, there have been many discussions and focus groups on how flawed the 5g cap is. It is now just being ignored because its making to much money. It was originally referred to as a "Silent Cap" by the higher ups. remember if you can the $99 limit cap charge? Well that was removed without any fanfare due to the loss of overage revenue. So please sue away until they get it right.

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@Silversmok3: No, that's like GM selling you a charging plan for your new super duper electic vehicle. They sell you on a cost of only $2 per day, presuming an average usage of X watts per hour, which they equate with 50km of driving.


Of course, you're an average US car buyer, you don't understand watts and you don't really know kilometers because we use miles, plus you drive in real life conditions - all times of day, night, and all traffic conditions - and you don't grasp how much each affects power usage. Their estimate, on the other hand, is based on very strict and limited testing conditions that only exist in fantasy test courses where they use no lights or wipers or radios and only accelerate once in that 50km of driving.


Then, after your first month of usage, where you enjoy zipping around in your new electric car so much, they bill you not an average of $2 per day but $180 per day and feel they can get away with it because 1) the rate is buried in the fine print 2) it "couldn't have been" glossed over by the salesman because salesmen are honest 3) The average consumer should be perfectly capable of reading and understand all the technical details that it took their engineers and lawyers and salesmen so much effort to obfuscate so completely.


There's one reason and one reason only for such charges and that's to take advantage of consumers. They could easily cut them off, throttle them, warn them, or have more reasonable and even graduated charges for additional GB of usage. Twice the usage of a plentiful resource should not cost 80 times as much.

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@Silversmok3:"To exceed the cap the way this lady has,she had to be doing something shady-unless she was slingboxing 24-7 over the 30 day billing period."

So using legitimate, if bandwidth intensive software is "something shady" now? Ever heard of Steam? I could kick off over 20gb of downloads on a given computer just by signing in and wanting to play some games (not even play them online). Ditto for multitudes of other services that deliver content via the internet. Not to mention that you can download legitimate stuff from BT as well - Linux distros, music the artists WANT shared, legal documents, etc.

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@Tito151: and to build off that analogy about leasing the car, it's like the lease contract saying 10K miles in the contract without specifically telling you, giving you a car without an odometer, and then giving you a huge charge because they tracked the car by GPS and SAY you went over.

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I don't understand companies that do this kind of overage billing. If 60 bucks gets her 5GB, then shouldn't ATT continue something similar to that for overage? I can understand ATT doubling it. Charge 60 for the first 5GB and then 120 for the next 5GB then 180 for the next 5GB...Maybe I'm over simplifying it...

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If she was transferring 10GB of data in a month, she certainly has at least above average knowledge of technology. You don't accidentally double your allotted data amount by sending emails and reading consumerist.


For 10GB/month, you can send 3.4 million emails assuming each email is 1 text page w/o attachments at approx 3 KB. Or you could view about 70,000 web pages at approx 150 KB. Or view 21,000 low res pics at 500KB/each.


Any other usage would indicate she does have some sort of above average internet experience - therefore, she should understand how data transfer works.

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How can these companies provide a limit and not give users a way to monitor it? It's like cell phones not giving you a way to check how many minutes you used and then charging you for going over? is that how cell phones used to have it until there was a class action lawsuit? i bet if you call AT&T or comcast or whoever and ask them how much you used because you don't want to go over, they probably won't or can't even tell you.

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@bleigh: So you don't think telling someone that the rate is in fractions of a penny is deceptive? I'm going to test Radio Shack employees today and see what they tell me. I wonder if they are all as forthcoming as you.

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@Silversmok3: So, if I download a high volume of data over the first month I own a new computer, I must be doing something shady? Windows Updates on a new machine alone can hit you for at least a couple of gigs. Downloading other programs to install on your *new* machine can also drive up that amount. And how do you know she wasn't doing something legit, like a work-related task that involved high download amounts? Or legally streaming music (through a service such as Pandora) or video (via Hulu)? With something like that, you're not saving all of the data you download, so hard drive space means nothing. Sure, you could argue that she should have watched her usage levels, but calling her "shady" and "a fraud" smells like bullshit to me. When you start giving overage costs per MB or GB instead of unreasonably useless KB costs, then I might be more sympathetic.

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When they ask you if you agree to the terms and services...

Try to read the terms and services.

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@RonDiaz: The connection is intended to be used for light internet/corporate intranet via VPN. The reason it is targeted at that market is because it is a high-cost luxery/business service. It isn't something the average consumer would need. It is for checking email and agendas while waiting for your flight and the like. As such, I think the service itself is not over-priced, and very little fault along that line should fall on ATT. What fault they deserve is in their marketing department that thought this was a good match to make with Radio Shack. A subsidized $100 netbook is targeted at a market that is decidedly not luxery/business. This is not to say that those markets don't look for good deals, just that a retail Radio Shack store (an assumption on my part, could easily have been online or via the phone, but the point stands) is not their first stop when looking for equipment. Quite simply, this offered deal is targeted at a demographic that the service is not suitable for. I'd split this blame as 60% to Radio Shack, 30% ATT, and 10% consumer. It appears that nobody did their due diligence in this case, but some may even have actively avoided it.

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@bravo369: This is patently untrue and I wish more people knew about air cards before spouting off about AT&T's fraudulent practices. You can monitor your usage as easily as you can monitor the mileage on your car, the usage is right on the little dashboard you use to connect via aircard. It's not hidden, you just need to be diligent about checking it, akin to keeping your mileage in check on a leased vehicle.
I had a customer at Best Buy whose bill ran to over $2000 and he swore that he only ever checked his e-mail. He was aware of the limit and costs associated. We called AT&T, charges were removed as a courtesy. Did the plaintiff in this case try calling and asking for a little grace?

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@pmcpa2: Actually she does have a leg to stand on. How is it possible that the first 5 gigs are priced at $12 a gb, and every gig after that is priced at $480. It's like some kind of cruel bait and switch. If you just go 512mb over that 5gb cap, you will be paying out the ass. If all her data was priced the same, her bill would have been 60 + 120. Which is somewhat reasonable if you actually believe wireless data is some kind of precious limited resource.

If there rates are going to be that exorbitant, they need to disclose the per gigabyte cost up front and set it so you get a popup warning when you hit the 5gb limit. And give you the ability to set it to shut off when it hits the limit.

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@verucalise: Satellite relies on customers who have no other options.

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@Silversmok3:


@joshua70448:


Remember, this is a 1gb RAM netbook-not a gaming machine or a media desktop computer.I ask anyone interested in buying these computers exactly how they plan to use it, and I make it clear theres a 5GB cap.No customer ive sold these to ever complained to me that it wasnt enough.


Now, lets come back to the case at hand. She's alleging that ATT/Radioshack defrauded her into running up a $5000 bill.For one, she signed a 2 year contract specifying the 5gb cap, and the consequences if she passes that. To add, the ATT software specifies the exact airtime useage, so she cant say she had no clue she passed 5gb.


We sit here and condemn mortgage borrowers for not reading the terms of their loan contract, but give a pass to a lady who does the same thing? Granted its over a computer, but reading what you sign is reading what you sign. By not reading and signing anyways, youve only got the face in the mirror to blame if shit hits the fan.

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@sapere_aude: LOL, read the contract? Haha. Good one. Even if the average customer does read it, they have no idea what a kilobyte is. Plus it could never be considered reasonable to charge 480 dollars a gigabyte after charging only 12 dollars a piece for the first 5.