Comcast Forced to Refund $700,000 to Customers Over Misleading Fees
A new settlement with Massachusetts explains that Comcast advertised one rate, then charged customers more when the bill actually arrived.
Comcast has been forced to shell out $700,000 in refunds and cancel the debt of more than 20,000 Massachusetts customers after a state attorney general investigation found the company routinely jacks up consumer bills via a bevy of misleading fees.
An investigation by Massachusetts Attorney General Maura Healy found that Comcast routinely advertises one rate, then charges customers up to 40 percent more when the bill for service actually arrives.
When shocked customers then tried to cancel or downgrade to cheaper broadband and TV plans, Healy’s office found they were socked with a $240 fee for violating long-term contracts. Many users were promised a locked-in rate of $99, but hidden fees and surcharges quickly left many with service plans they couldn’t afford, the AG said.
“Comcast stuck too many Massachusetts customers with lengthy, expensive contracts that left many in debt and others with damaged credit,” Healey said in a statement. “Customers have a right to clear information about the products and services they buy. This settlement should encourage the entire cable and telecommunications industry to take a close look at their advertisements and make sure customers are getting a fair offer.”
Under the new settlement with Massachusetts, Comcast must forgive all outstanding debts for unpaid early termination fees and related late fees, clearly disclose all fees in future advertisements, and train the company’s service reps to more clearly outline billing caveats.
Comcast downplayed its use of misleading fees when contacted by Motherboard.
“Today’s settlement with the Massachusetts Attorney General’s Office reflects our ongoing effort to improve the customer experience,” Comcast claimed.
“While we disagree with the allegations in the Assurance—which relate to years-old advertisements and do not reflect Comcast’s current policies and practices—we are committed to partnering with Attorney General Healey and others who share our commitment to improving the experience of our customers in all respects,” the company said.
But while Comcast states it no longer engages in this kind of behavior, that doesn’t appear to be the case.
One lawsuit against Comcast filed in 2016 noted how the company’s “broadcast TV fee,” introduced in 2014 and still on consumer bills today, simply takes a part of the company’s programming costs and buries it below the line. The company’s “regional sports fee,” introduced in 2015, also takes the cost of regional sports networks and applies it as a post-sale surcharge.
This practice lets Comcast advertise one rate, then charge another. It also lets the company falsely claim its rates haven’t increased. The lawsuit stated that Comcast nets roughly $1 billion in additional revenue from such fees annually, or about fifteen percent of the company’s annual profits. And the fees have only climbed since being introduced, plaintiffs noted.
“Since 2014, Comcast has increased the monthly Broadcast TV Fee from $1.50 to up to $6.50,” the complaint stated. “Since 2015, Comcast has increased the monthly Regional Sports Fee from $1.00 to up to $4.50.”
As Motherboard has previously noted, these fees have jumped 241 percent in the last three years alone. While there’s some variations by market, Comcast’s broadcast TV fee alone now tacks nearly $8 on to user bills every month. When criticized, Comcast has previously tried to claim such fees are just the company’s way of being “transparent.”
Federal regulators at the FCC and FTC have generally ignored the practice of misleading fees plaguing the telecom, banking, hotel, and airline industries. While the FCC did flirt with some voluntary requirements that forced ISPs to be more transparent about such surcharges, those modest guidelines were demolished with last June’s industry-backed repeal of net neutrality.
While Comcast likes to repeatedly claim that it’s doing everything in its power to listen to angry consumers and address their complaints, that generally hasn’t been reflected in most customer satisfaction studies to date. Advertising one rate then charging you another is just one of countless bad habits the cable giant simply refuses to kick.