New iPhone Billing Woes

Will the iPhone embarrassments never end? The iPhone was supposed to be a design and marketing triumph, yet between AT&T botching certain aspects of the launch and billing, plus furor over the price cut, the phone continues to be in the press for all the wrong reasons.

The latest mess is that iPhone users who bring their phones with them while traveling internationally but kept them turned off still rack up huge charges. Apparently the phone keep updating e-mail even when turned off, and the iPhone’s international data charges are very high. Newsday reports that one family got a bill for $4800 while abroad (admittedly for three phones). And the response from AT&T lead one to believe that this feature cannot be overridden.

AT&T not responding in a consumer-friendly manner. It is offering only to write off only a portion of charges, and claims it is typical for smartphones to check e-mail even when off.

From Newsday:

While Levy, his wife and his daughter were enjoying the trip, and even while they were sleeping, their three iPhones were racking up a bill for data charges. The iPhone regularly updates e-mail, even while it’s off, so that all the messages will be available when the user turns it on.

“They have periodic updates on their data files, and they translate into megabucks,” Levy said. “This is akin to your bank having automatic access to your ATM machine and is siphoning money out during all times of the day and night without your knowledge.”

Levy and his daughter each have three e-mail accounts on their iPhones, and they were each billed more than $1,900.

His wife’s phone had one e-mail account, and her bill hit $890. One connection alone ran $223. Levy said he has complained all the way to office of AT&T’s president.

Data transfers are not a problem domestically, where the AT&T Wireless plan includes unlimited data transfers for the iPhone.

But the iPhone’s international plan in 29 countries, mostly in Europe, costs $24.99 for 20 megabytes. In countries outside the plan, charges can run from $5 to $20 per megabyte, said Ben Wilson, editor of iPhone Atlas, a Web site owned by the online news company CNet.

“It was a big surprise,” Wilson said. “Consumers didn’t expect that the charges were going to be so high and that the phone was going to be doing all this data transfer in the background that they weren’t aware of.”

Herbert Kliegerman, 68, a real-estate agent from the Bronx, said he incurred $2,000 while visiting Mexico. He filed a lawsuit seeking class-action status in New York State Supreme Court last week, alleging that Apple did not properly disclose the international roaming charges.

AT&T Wireless offered to refund $1,500 to Kliegerman, but he said that’s not good enough. “I want a full refund,” he said.

Apple spokeswoman Natalie Kerris said the company adequately discloses the potential charges on the Web site and when the phone is activated.

The 6,707-word terms and conditions document on the AT&T Web site says: “Substantial charges may be incurred if phone is taken out of the U.S. even if no services are intentionally used.”

Kliegerman said said most people don’t read the lengthy terms and conditions. Furthermore, the rate plans listed on the site indicate “unlimited data (Email/Web),” without an asterisk. He said that’s misleading.

Kliegerman’s lawyer, Randall S. Newman of Manhattan, said about 15 people from around the country have called him complaining of international roaming charges and the inability to unlock the phone to use it with another carrier.

Apple hasn’t yet released the iPhone abroad. Levy said he didn’t expect data transfer charges internationally because he believed the data network in Europe wasn’t compatible with the iPhone. The Levys brought their phones with them for voice calls.

Other smartphones also automatically update e-mail and other data such as weather and stock prices, but those phones offer a wider variety of international pricing plans in more countries than is available on the iPhone, AT&T Wireless spokeswoman Ellen Webner said.