Thursday, October 16, 2008

AT&T Engages in Consumer Deception/Fraud in iPhone Contracts

The iPhone is a smartphone manufactured by Apple and sold through AT&T and Apple. In the US the iPhone works only on the AT&T network. AT&T is deceiving and defrauding iPhone buyers via the following practices.
  1. Lock-in past contract termination/expiration
    
iPhone buyers sign a 2-year contract for voice and data services from AT&T. The contract may be terminated by the customer at any time before the 2-years are up, on payment of a $175 penalty. AT&T will not provide the code(s) to allow a consumer to use an alternate provider even after the contract ends or is terminated. AT&T says, in a email response to me on this: “Unfortunately, the iPhone cannot be unlocked, even if you are out of contract.
If an iPhone owner cannot get the unlock code(s) then they are prevented from replacing the AT&T SIM card with a SIM card from an alternate GSM provider of their choice. Therefore, AT&T is attempting to illegally extend the contract past its legal termination/expiration.

  2. Lock-in to AT&T service when traveling outside the United States

    AT&T refuses to provide the GSM unlock code(s) for international travelers and forces iPhone users to connect to voice and data services solely via AT&T and its affiliates abroad. For example, if I travel to India I can use my iPhone to make calls within India, but only via AT&T. The rates for both voice and data services that AT&T charges are exorbitant compared to the rates from local GSM providers. The contract that iPhone buyers sign with AT&T has to do only with voice and data services within the US. iPhone buyers should be free to use a provider of their choice when traveling abroad. In fact, AT&T provides the unlock code(s) to international travelers for a wide variety of other GSM phones it sells. Just not for the iPhone.
AT&T’s refusal to provide the unlock codes once the contract has ended and to allow use of the iPhone on other carrier networks abroad is also in violation of the Digital Millennium Copyright Act (DMCA) which explicitly states the right of consumers to connect their phones to a different wireless carrier.
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