Customer Gets $5,000 Bill for Subsidized Netbook By Exceeding 5GB Cap

gotcha-jpeg-image-590x417-pixels-1Ouch. Speaking of subsides on Netbooks, a customer got socked with a $5,077 bill for using her newly acquired AT&T subsidized Netbook. She’s filing suit against AT&T and Radio Shack.

She purchased her subsidized Netbook from Radio Shack for $99 and signed the two-year agreement for the data plan at $60 per month, but keep in mind that many of these data plans have caps, and this one at a 5GB cap. Yep, that’s 5GB.   She’s claiming the advertising was misleading in her suit which she hopes to to turn into a class action.

You can read more about it at Ars Technica, but in the meantime, make sure you check out the fine print when you’re looking at signing those contracts for data services, and make sure you find a way to monitor your usage.

7 Comments

  1. Chris

    03/03/2009 at 9:54 am

    When I read the headline I thought to myself that no one could possibly use that much data! But then looking at the figures and doing the math it isn’t unreasonable. AT&T charges $.00048/KB for additional KB’s over the 5GB limit. So doing the math here I find that she used just over an additional 10GB. This is likely significantly less data than I use monthly on a normal cable connection. I don’t know who’s to blame here; AT&T’s impossibly low data cap and high premium for overage data or the person’s ignorance of the terms and conditions of her contract. That’s a hefty bill though!

    Reply

  2. Mickey Segal

    03/03/2009 at 4:24 pm

    At this rate, the 5 GB included for the monthly fee would be valued at $2,500. The $60 charged for the service gives no clue that extra bandwidth is charged at 40 times that rate.

    There are similar issues with web hosting companies charging much more for bandwidth over the included amount. They explain it by the fact that most accounts use far less, so they are actually charging for a lower average amount as part of the basic plan. But such companies typically warn you if you are approaching the limit, the penalties are not 40 X the basic service, and the limits tend to be pretty reasonable.

    Do such extra charges apply to AT&T’s iPhone customers too? I suppose it is harder to download that much on an iPhone, but a $5,000 bill would still be a nasty surprise.

    Reply

  3. Xavier

    03/04/2009 at 1:52 am

    AT&T’s data plans don’t make sense at all. They charge different rates for the same data depending on your device and it’s completely arbitrary.

    For example, on a domestic DataConnect plan you get 5GB for $60, but only 1% of that bandwidth (50MB) for $40.

    I’d love to be able to use my iPhone overseas, but it would cost me $24.99 for the first 20MB and $.0195 per additional KB. If I were to add a Blackberry data plan it’d cost $65 for an unlimited international data plan.

    I don’t know if this lawsuit stands a chance or not, but 5GB is not a whole lot of data if you use a data card on a daily basis.

    Reply

  4. Micky

    03/04/2009 at 6:02 am

    Pure stupidity on her part not reading or listening to the terms of contract. I use and have been using my AT-T U595 air card for over 23 months now and still have not gone over my 5 gig cap.Daily usage from when i wake to sleep,16-17 hours powering our Cradlepoint 3g router and still have yet to hit the cap,but then I dont ytube,or twitter my day away.

    Reply

  5. xread

    03/04/2009 at 4:20 pm

    This isn’t stupidity by the customer, it is purposeful and blatant exploitation of the less tech-savvy segment of the market who are attracted to netbooks because of the price and may not be as clued-in as many of us who live for this stuff.

    If you purchase a 5GB data plan for $60, it is quite reasonable to expect additional charges to be within the same order of magnitude. But at ~$480 per GB (and without an automatic halt to the service pending contact with the customer), it puts it within the same class of charges you’d expect from loan sharks.

    Reply

  6. xread

    03/04/2009 at 4:28 pm

    Following up on my previous comment after reading the story over on Ars, I have to add this from another commenter that highlights the decptive pricing pradctices:

    “they “go to considerable lengths” to obscure the costs of their service, listing additional data costs on their 5 GB plan as $0.00048 per KB (instead of the more informative $480 per GB).”

    but even better:

    “BTW, all those whining about the data costs–just check out the cost per byte of an SMS. An SMS message has 160 bytes of payload, and will typically cost about 8 pence; at today’s exchange rate that’s $755,000 per gigabyte. Yes, three quarters of a million dollars per gigabyte.”

    Reply

  7. xmangerm

    03/12/2009 at 10:41 am

    I think the lady has a somewhat good case against her charges. In Germany T-Mobile offers this 1 Euro Netbook (39 Euro per month) http://www.t-mobile.de/mini-notebook/0,18488,22510-_,00.html with a 24 month contract.

    At the end of the web page one will fine the typical â€Ŕfine print”.of any contract However, in contrast to the scrupulous AT&T data plan after a data volume of 5 GB per month is used up the service doesn’t cost a cent more but one is only able to download Max 64kbit and upload Max 16kbit until the start of the next month.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *