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AT&T, RadioShack face class action suit over netbook data plan

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Operators continue to grapple with pushing access plans while imposing data caps on those plans, especially as they look to bundle netbooks and data plans. Now the issue has come to a head with a class action lawsuit filed in U.S. District Court in Oklahoma.

Billie Parks filed suit on behalf of herself and others against AT&T Mobility and RadioShack after she purchased a $100 netbook at a RadioShack bundled with a two-year data contract from AT&T. Her first bill was more than $5,000.

"Although the customer service summary informed plaintiff and other consumers that their first bill might be higher than expected because of a $36 activation fee, one month's service billed in advance, and prorated charges and fees for the month when the customer signed up, 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," the lawsuit stated. 

The lawsuit accuses AT&T Mobility and RadioShack 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. The suit seeks restitution of all of the additional charges under the data plan; an end to the RadioShack/AT&T Mobility DataConnect contracts; more damages because of alleged harm to the plaintiffs credit; and an injunction that keeps AT&T Mobility from enforcing the additional charges provision of its data contracts, and other fees.

For more:
- see RCR Wireless

Related articles:
RadioShack announces $99 netbook tied to AT&T data contract
2008 Year in Review: Netbooks and 3G dongles drive mobile broadband
Sales of netbooks set to rise in 2009
ABI: Ultra-mobile device shipments to exceed 200M by 2013
Vodafone Hungary implements 'soft caps' on mobile data usage
Mobile data: Can carriers ride the wave?

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Comments (15) | Post a comment
More stories about RadioShack   netbooks   Mobile Data   AT&T Mobility  

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Hmm....Apple/AT&T is no different with regards to the iPhone. Consumers must be very careful when dealing with all operators when it comes to smart devices that are constantly accessing data. The only way you get minimal charges is by shutting off the data capability of these products
Sounds familiar - Buyers beware of the giants. Not well thought out
Next week, CBS Sports will be promoting the NCAA Men's Basketball Tournament by informing their viewers on TV that they can freely watch the tournament whereever they have an Internet connection at CBSSports.com. In turn, millions of viewers will watch the games on their computers and tune into the live game feeds. Major League Baseball is selling selling subscriptions for fans to watch their favorite teams' games out of market over MLB.com. Not once will you see any disclaimer that if you view the events on your computer, you could be subject to using 200MB of data for each hour you watch the games. This can be an expensive proposition for Verizon, AT&T and Sprint subscribers to their 3G wireless products. Consumers have been trained over the years to access the Internet for a certain price for unlimited service. As I agree, 5GB is a large amount of data usage for a month of service. 98% of subscribers do not go over the threshhold of 5GB of data usage, but as more and more opportunities come over the Internet to stream video for events and activities, those numbers will increase. The average consumer does not know how much data they are utilizing. When they purchase a wireless telephone, they know how many minutes they are consuming, up to the second but data usage is very difficult to track. The wireless companies provide a data usage button on their access managers, however the data usage statistics are only accurate up to the previous day and do not reflect realtime statistics of usage. I think the wireless companies have gotten themselves into this mess with very poor policy decisions made by people who do not know what they are doing. If they do not want consumers to surf the net the way they did before they purchased a 3G data card, why are they even selling data cards? Why are they allowing companies like Netgear, Kyocera, D-Link, Cradlepoint and Linksys to build 3G wireless routers so customers can share their 3G connection and further tack on the bandwidth? I believe the plantiff in this case has an excellent chance of defeating the companies. CONTRACT OR NO CONTRACT, NO CONSUMER SHOULD EVER RECEIVE A BILL OF THOUSANDS OR EVEN HUNDREDS OF DOLLARS WHEN THEY ARE EXPECTING TO PAY $59.99 A MONTH WHICH IS ALREADY AN INFLATED PRICE TO SURF THE INTERNET! Especially without a warning of some kind. Personally, I sell these products and I warn each and every customer about the usage threshhold. However, customers will be customers and most do not even understand how to properly use their computer and with the low prices for netbooks, many are getting their first computer and since the prices are so low, they are purchasing these computers for each member of their family, along with a wireless router to share the connection. When events like March Madness, MLB and even things on Youtube, Facebook and MySpace show up, this attracts the masses. They do not realize there is a "pay to play" consequence involved as they are more inclined to use their computer the same way they watch TV because that is why they are paying the cable or satelite companies the high fees in the first place. $59.99 a month for 3G wireless Internet access is high enough. When you are expecting a $59.99 bill in the mail and it is hundreds, if not thousands of dollars more, WITHOUT WARNING, there is a problem and what do the wireless companies expect to happen, as they are selling these products to consumers and are promoting the products on billboards and commercials during prime viewing time on TV? These policies were put into place by these companies by executives who really do not know what they are doing. These are voice policies for data usage and they are wrong. This happened in the CDPD (cellular digital packet data)era in the mid to late 1990's and now it is happening again today. IT NEEDS TO STOP SINCE MAINSTREAM CONSUMERS DID NOT PURCHASE CDPD BUT THEY ARE PROMOTED TO AND ARE PURCHASING 3G AND LATER 4G! Say what you all want that a consumer signed a contract and should be aware of the data threshhold of 5GB and 25-50 cents per MB overrage charge. The average consumer does not know how much data they are using and the wireless companies are not making it easy for them to know this. ATTORNIES WILL HAVE A FIELD DAY WITH THIS, POLICY OR NO POLICY, CONTRACT OR NO CONTRACT. To make the plantiff's case stronger, you can go to 100 people selling this product and 100 people will sell the product in different ways, telling customers different things. The disclosure aspect is abysmal and leaves things wide open for litigation. When consumers get screwed, the public will hear about it. The solution to this mess is simple. The wireless companies created it and need to decide whether they should continue to sell these exclusive wireless data products at all if they are so concerned that 2-5 percent of their users will damage the entire industry by watching streaming video and using more bandwidth than the other 95 percent. Should they wait for the 4G products to come out like LTE or WiMax? Will LTE or WiMax be any better? If not, they are setting themselves up for failure by selling faster speeds and limiting the output to consumers. As more and more consumers are able to afford computers and have wireless mobile broadband access, this problem will become more and more commonplace. Ladies and gentlemen, this is not the last you are going hear of this. The best will be yet to come! I promise you!
AT&T has been talking about Exaflood for some time,capping the Internet usage. But when 4G is fully deployed, this practice will be priced out. Subsidized phones will be out of market later on.
I agree with Irresponsible Consumers. I have nothing else to say after that, they said it all. I am glad I am not the only one that sees how backward and UNFAIR this setup is. When I first found out about the 5gig cap, I was speechless. I am one of those people who stream videos online, and surf online more than I watch cable etc. I would go over that cap in less than a week. I also have DSL at home, and I won't mind having to control myself for the 5gig cap, but NOT for that $60.00 a month! That's being a consumer thief. I so want to get the service, but they need to DO BETTER.
I was a victim of this same con from my cell phone company SPRINT. I will bring this to the appropriate authorities as well so I can get this started against Sprint myself.
How about you read the contract before you buy it? Why are theses companies responsible for your mistake? Be a smart consumer and make sure you know the facts and don't impulse buy.
Whenever a company says they have a deal for me, I wonder how much time the company spent trying to figure out how to rig the deal? Unfair you say? Salesmen play up the advantages to a customer but like the man says, if it aint in writing, it aint happening." I worked at a cell provider and because there were comission programs for the salesmen, many salesmen lied to the customer, the customer would sign, and then the salesman would try and get an advance payment on his commisions before the customer found out he/she might have been lied to, or duped into signing. If products are great, and many are, then why haggle over service? That seems to be the Achilles heel of every buesiness in America. The mantra of "I got your money, now dont bother me with questions about quality, warranty, or replacement. Ask the questions, ask for what you want in writing. If they fudge, and say its already in the contract, walk away. You're dealing with a liar.
We got a new phone for my son…. I know, I know… don’t say it. I didn't even think to block the internet. 16 youtube videos later in 4 days I have a $1309.84 cell phone bill. Verizon won’t budge in it. They said its my mistake. I understand that. So rap the top of my head with your knuckles. Don’t use a sledgehammer to rap my head. Charge me for a month of "unlimited data" for $30.00. Couple questions I have. 1. Why is internet automatically turned on? You actually have to turn it off or block it. Cust service said I should have signed up for "unlimited data plan". I didn't get the unlimited data plan because I didn't want him on the internet. I didn't think it was automatically on. 2. After the 1st video that was 11.73MB and a cost of $167.82. Being a good corporate citizen shouldn’t you notify the primary account holder (your valued customer) that the phone bill just doubled in 5 mins? They told me they have millions of customers and that was not feasible. Safe guards are great customer service. Safe guard means you will go the extra mile for your customers. So they don't shoot themselves in the foot. Credit card companies do it. And they have as many customers as Verizon does. 3 Shouldn’t there be a cap of what you have to pay? The so called “Unlimited plan” is $30.00 a month. How can a company look at the oops factor and say" I'm sorry its your fault you must pay." Do they really think a person would knowingly say " I know this will cost me $1000, $2000 or $12000 (Verizon CSR told me he paid $12000 because of his 2 daughters) to be on the internet a ton. They should automatically switch you to the unlimited plan if your at double the cost of the unlimited plan. They could charge you double the unlimited plan and sternly warn you if it happens again then you will be charged the full amount. 4. How do you Mr./Ms. Cell phone company charge a customer $500 for KGB of data? Or a $170 for 1 youtube video? This is price gouging plain and simple. We as customers need to stand up for what is right and fair. In summary- I know I'm responsible for my son. I also run a business and I would look at those outrageous charges as anomaly and take care of my customer. I also wouldn't look at the $1000, $2000 or the $12000 and cheer my sales growth. Because I know that is not the way to grow my business. A customers mistake should not be the companies overall gain by 3830% (in my case) increase in charges. Update- As I am writing this a Verizon supervisor told me "There is nothing they can do". These are valid charges"....... I told her "I am a customer of 11yrs. I have never asked for a credit, been late on a bill and never complained about anything. I have also referred 4 primary accounts with a total of 15 cell phones plus our 3 phones over the years. I have paid over $13000 (soon to be well over $14000) in cell phone service to Verizon over 11 yrs. And then add the referred accounts. That is a lot of money. Up until last week I absolutely loved Verizon Wireless and would swear by it. Now I will unfortunately have to tell you.... I will pay this bill in full. Then I will pay to have my service cancelled. And I'm sincerely sorry to say it must come to this. I really wish I told my son those 5 little words "Don't go on the Web." Your former customer, Scott
I agree, but they set it up this way. They don't want you to know, and they don't care. Look what happened, they will make more money off you for your one "mistake" than they would for a years worth of service. Hate Verizon? Use a different carrier. I plan on changing as soon as my contract expires. They DO know what they are doing. Remember Ma Bell? They don't care, they don't have to.
I agree, but they set it up this way. They don't want you to know, and they don't care. Look what happened, they will make more money off you for your one "mistake" than they would for a years worth of service. Hate Verizon? Use a different carrier. I plan on changing as soon as my contract expires. They DO know what they are doing. Remember Ma Bell? They don't care, they don't have to.
If you have a PDA / smartphone, Sprint bangs you the same exact way. I would notice my phone lighting up and "dialing out" to #777 for no apparent reason. I though nothing about this, as I assumed it was updating or something. Then I used the phone ONCE for GPS. The first bill was over $600 due to this "automatic" connecting. Customer care credited me for it of course, but stated that although I had the unlimited data plan, I ALSO needed a "special" plan for the smartphone (they gave me it for $10 more a month after I bitched about it). They have recently changed their plans around - probably because of this problem. This are SAME tactics AT&T uses to screw people on their "special" iPhone plans. They get you one way or another.
The same thing happened to my husband. He signed up for an unlimited plan, but we recieved a 5,000 bill. He called at&t and they told him they fixed the bill, which they did and we assumed all was well. We wanted to just cancel the plan, but they would not let us because we had signed up for a 6 months of usage. The next month we recieved a 3,000 bill and this time they won't change it. What do we do? If we are in litigation with them will it still look bad on our credit report? We are trying to buy a house and don't know if it is worth it to just pay it so it won't mess up our credit. However, I don't want to pay it and think it is beyond unfair and would love to join a class action law suit to not have to pay it. Is there anyone else in Louisisana that has this problem? We are not people who love to get into legal messes with lawyers, but we just want it to be fair.
I don't get how people are using this so much that they rack up such a bill. I mean, I'm on Verizon's 250 MB plan with my MiFi and I don't even get close to that much usage - and I'm actually hosting GoToMeeting sessions, doing file transfers, etc. Yet people claim they play 4 YouTube videos and come up with a bill in the thousands of dollars? I just find that extremely difficult to believe. I also don't understand why people are using this EV-DO as their primary internet. If the people are using it at home, why are you not switching to your regular wireless/Ethernet/whatever? If you don't have internet at home, you shouldn't be shopping for a netbook with a data plan. IT IS NOT INTENDED FOR PRIMARY USE. If you're on the 5GB plan then you definitely have no excuse.
Just because you find something "extremely difficult to believe" does not make it untrue. These cell companies are thriving on taking advantage of people. So you think paying more for your "secondary" inet usage than your primary service and not using even 1/10 of the bandwidth is fair? Do you think these consumers are given an idea in advance what will happen to them? If the companies wanted, they could set it up so that you are notified of your usage, your bill, your costs, etc. They don't let you know cause they don't want to. In these days of microprocessors, they can do anything!!! They know what they are doing, they just don't care. There is no accountability.

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