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Comcast Fined $2.3 Million For Charging Customers For Unrequested Services

Federal communications Commission logo After receiving numerous complaints from consumers, the U.S. Federal Communications Commission (FCC) investigated and announced yesterday that Comcast will pay a $2.3 million fine for charging its customers for services and equipment they did not request. The FCC announcement explained:

"The Communications Act and the FCC’s rules prohibit a cable provider from charging its subscribers for services or equipment they did not affirmatively request, a practice known as “negative option billing.”  Negative option billing burdens customers with the responsibility of contacting a cable company to dispute the charges and obtain refunds. The Communications Act and the FCC’s rules prohibit a similar practice by telecommunications carriers when unauthorized charges are placed on customers’ phone bills, an abuse known as cramming."

Comcast logo The complaints by consumers included:

"... unordered services or products, such as premium channels, set-top boxes, or digital video recorders (DVRs). In some complaints, subscribers claimed that they were billed despite specifically declining service or equipment upgrades offered by Comcast. In others, customers claimed that they had no knowledge of the unauthorized charges until they received unordered equipment in the mail, obtained notifications of unrequested account changes by email, or conducted a review of their monthly bills. Consumers described expending significant time and energy to attempt to remove the unauthorized charges from their bills and obtain refunds..."

This is the largest civil penalty assessed by the FCC to a cable provider. Additional terms of the settlement agreement require Comcast to implement a five-year compliance plan:

"Specifically, Comcast will adopt processes and procedures designed to obtain affirmative informed consent from customers prior to charging them for any new services or equipment. Comcast will also send customers an order confirmation separate from any other bill, clearly and conspicuously describing newly added products and their associated charges. Further, Comcast will offer to customers, at no cost, the ability to block the addition of new services or equipment to their accounts. In addition, the settlement requires Comcast to implement a detailed program for redressing disputed charges in a standardized and expedient fashion, and limits adverse action (such as referring an account to collections or suspending service) while a disputed charge is being investigated."

Comcast customers experiencing unresolved problems are encouraged to submit complaints online to the FCC, or contact the FCC Consumer Center at 1-888-225-5322, TTY at 1-888-835-5322, fax at 1-866-418-0232, or via postal mail:

Federal Communications Commission
Consumer and Governmental Affairs Bureau
Consumer Inquiries and Complaints Division
445 12th Street, SW
Washington, DC 20554

Comcast has a checkered history of customer service. In 2014, the Internet service provider (ISP) began to convert customers home wireless routers to public hotspots, which placed the burden on customers to opt out. A customer-friendly approach instead would have asked interested customers to opt in.

In 2015, reports surfaced that 13,000 consumers had filed complaints about the ISP's usage-based pricing services. The same year, Comcast paid $33 million to settle privacy violations affecting its VOIP phone customers. Earlier this year, Comcast proposed the idea of charging customers (phone, Internet, TV, cable) additional fees for privacy.

Comcast issued a statement down-playing the FCC fine and consent order:

"We have been working very hard on improving the experience of our customers in all respects and are laser-focused on this. We acknowledge that, in the past, our customer service should have been better and our bills clearer, and that customers have at times been unnecessarily frustrated or confused. That’s why we had already put in place many improvements to do better for our customers even before the FCC’s Enforcement Bureau started this investigation almost two years ago. The changes the Bureau asked us to make were in most cases changes we had already committed to make, and many were already well underway or in our work plan to implement in the near future.

We do not agree with the Bureau’s legal theory here, and in our view, after two years, it is telling that it found no problematic policy or intentional wrongdoing, but just isolated errors or customer confusion. We agree those issues should be fixed and are pleased to put this behind us and proceed with these customer service-enhancing changes."

This latest incident with Comcast reminds me of the unlawful sales practices at Wells Fargo, where bank staff created new accounts without customers' consent or notice, all to game the sales incentive system. The CFPB assessed a massive fine on the bank earlier this year. Both incidents seem to indicate poor or asleep management and a lack of internal oversight and controls. 13,000 consumer complaints seems substantial.

What are your opinions of Comcast and the FCC fine?

Comments

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Chanson de Roland

So Comcast's conduct reported on, supra, is called “negative option billing” or, when done by telephone companies, "cramming." In law school we learned other names for those things, such as theft, fraud, and/or larceny by trick. I think that I will stick with the names for such conduct, as described, supra, that my law teachers taught me.

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