Both Comcast And Verizon Agree To Pay Millions To Settle Overbilling Claims

from the but-you-can-trust-them dept

Thu, Oct 30th 2014 10:28am — Mike Masnick

The big broadband players keep trying to tell us (and politicians and regulators) how good they are and how much we can trust them. Part of their whole pitch on killing net neutrality is that they'd never do anything to harm consumers. And yet... Just this week, the FTC has sued AT&T for lying to consumers about its "unlimited" plans (just weeks after AT&T was fined for "cramming" bills with unwanted charges). And in the last few days it's also come out that Comcast has agreed to pay $50 million to settle overbilling claims, and Verizon has agreed to pay $64 million to settle overbilling claims. And that was all by Wednesday. There's still more time this week.

If these were one-off situations, it would be one thing. But these companies have a fairly long history of shady billing practices, dreadful customer service and similar antics. This is part of the reason why some people are so concerned about the various merger attempts by these companies and why they're all actively seeking to block meaningful regulatory oversight. Bad practices like these can be limited when there's meaningful competition -- but even the FCC is now admitting we don't have that in the broadband market.

This is a real problem.

Broadband access has become such a key part of how we live and how we work. And it's controlled by companies that have a long and detailed history of treating their customers horribly, lumping on bogus fees, overbilling and providing horrible, horrible service. That's not a recipe for a strong and innovative future. It's suggesting some companies are focused on squeezing as much cash as possible out of consumers, while providing a bare minimum level of service and blocking any and all attempts at meaningful competition.

These latest overbilling settlements are just a few small examples of a much larger problem that has been going on for years. It's something that absolutely needs to change. And it won't change by making those companies more powerful and limiting the competition even more.

244887187 Comcast Settlement 88281 (PDF)244887187 Comcast Settlement 88281 (Text)

244914280 Verizon Settlement (PDF)244914280 Verizon Settlement (Text)

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Filed Under: broadband, consumers, overbilling, power
Companies: at&t, comcast, verizon

30 Comments

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Michael, 30 Oct 2014 @ 10:42am

But I am sure this time, they really, really mean it, so it will never happen again.
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Rich Kulawiec, 30 Oct 2014 @ 10:47am

It's time to nationalize the infrastructure
Clearly, the duopoly have absolutely no intention of providing world-class service at reasonable prices; heck, they have no intention of even providing mediocre service at inflated prices. What they do intend to do is extract as much money as possible, no matter what it costs customers, no matter the damage it does to the economy, no matter how badly it impacts innovation and competitiveness.

So the heck with it: it's time to nationalize and run it as a shared, vital national resource -- not unlike the highway system. (Can you imagine what it'd be like to drive from Chicago to Pittsburgh if Verizon and Comcast operated the roads? Yipes.) Take over the existing physical plant. Create jobs laying fiber (it's been done before, and it worked, e.g. WPA, CCC). Provide a level playing field at some network layer -- maybe layer 2, maybe layer 3 -- and invite ISPs to compete for customers on that base, the same way that trucking companies compete for freight.

Yes, this will suck, because it will be fraught with government bureaucracy and waste and all the other things that we've come to associate with huge public works projects. But I submit that it cannot possibly suck more than what we have right now, which is national network service that is embarrassingly slow, unreliable, and increasingly manipulated. (See, for example, just in the last week, What is Comcast/Xfinity WiFi Code Injection Doing? and Verizons Perma-Cookie Is a Privacy-Killing Machine. Not to mention all the other crap they've done/are doing/will do.)

The duopoly has had its chance to provide the nation with best-in-the-world broadband services. It has failed miserably for decades and it's actively trying to fail harder. We can't afford to have the nation where the Internet was invented become the place where it starved to death because of corporate greed.
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AnonCow, 30 Oct 2014 @ 10:51am

Overbilling is a start. Now let's get a settlement for under-delivering...
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Yes, I know I'm commenting anonymously, 30 Oct 2014 @ 10:53am

It becomes more and more clear that the state needs to control the infrastructure if you want competition on services. It works quite well for transport, not so good for energy (we have a limited monopoly here in the Netherlands) and not al all for telecommunication.
If the politicians are unwilling to demand net neutrality for internet (and enforce it), they should be willing to sell the road network. I know some people who would love to buy large parts of the road network...
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Michael, 30 Oct 2014 @ 10:59am

Re: It's time to nationalize the infrastructure
The only thing I can think of that is worse than the current situation is handing over the infrastructure for our communications to the government that is intent on monitoring all of our communications illegally without our knowledge.

I'm pretty sure the first project they started on would be routing all of the fiber connections through the NSA data center.
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Anonymous Coward, 30 Oct 2014 @ 11:10am

All I can say on this one is preach it brother.
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Anonymous Coward, 30 Oct 2014 @ 11:12am

Re: Re: It's time to nationalize the infrastructure
Yeah, as much as I hate to say it, no one with power has particularly clean hands in this matter.
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John Fenderson (profile), 30 Oct 2014 @ 11:13am

Re: Re: It's time to nationalize the infrastructure
In terms of privacy, it doesn't matter if the infrastructure is nationalized or not. The government will spy to exactly the same degree either way.
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John Fenderson (profile), 30 Oct 2014 @ 11:16am

Re: It's time to nationalize the infrastructure
"Can you imagine what it'd be like to drive from Chicago to Pittsburgh if Verizon and Comcast operated the roads?"

I can easily imagine this. You'd have to pay a steep base per mile rate for the privilege, you'd pay all those sneaky little charges and service fees for the privilege of paying them money, you'd have to have you car outfitted with a GPS tracker, and all but one lane of the freeway would be allowed to degrade to so you can't safely go highway speeds on it. But never fear, because for a steep surcharge you'd be allowed to use their well-maintained fast lane.
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Josh in CharlotteNC (profile), 30 Oct 2014 @ 11:23am

Re:
I'm sure you're being sarcastic, but of course they'll do it again. Even after settling these cases, they're ahead.

I haven't seen numbers for Comcast yet, however the damages to Verizon customers was estimated at $156 million. Verizon paid $64 million. By my math, that means Verizon is up about $90 million minus lawyers cost (and since the "winning" side's lawyers got $20 million, Verizon is still definitely ahead).

Until companies have to pay more than what they gained when they break the law, there will never be any incentive for them not to do it in the first place.
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Michael, 30 Oct 2014 @ 11:29am

Re: Re: It's time to nationalize the infrastructure
allowed to use their well-maintained fast lane

Everyone gets the fast lane, for an extra charge you get to use the "hyperspeed" lane.
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Karl Bode (profile), 30 Oct 2014 @ 11:36am

Re: Re:
That's what I love about these issues, is that these companies have a generation of bad behavior on the books, but every time they apply for a merger, ask for deregulation, or demand favors they promise to be on their best behavior (and by and large the press ignores the history of issues). I'm not sure where or when as a culture we'll just stop believing them and tell them to go home.
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Karl Bode (profile), 30 Oct 2014 @ 11:38am

Re: Re: Re: It's time to nationalize the infrastructure
Well yes, AT&T whistleblower Mark Klein already illustrated that the dividing line between AT&T and the NSA is pretty fuzzy, with live fiber splits made available in AT&T network centers already.
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Karl Bode (profile), 30 Oct 2014 @ 11:38am

Re:
And how about all the sleazy below the line fees that are completely made up?
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Rich Kulawiec, 30 Oct 2014 @ 11:47am

Re: Re: Re: It's time to nationalize the infrastructure
Exactly so. We are WELL past the point when we could trust the duopoly to push back against government intrusion, so it really doesn't matter if the if the fiber plant is operated by Verizon or by the NNA (National Network Administration, which I just made up).

Security/privacy models built on the presumption that the infrastructure is itself secure and private are doomed...in the same way that security/privacy models built on the presumption that highways are secure and private are doomed. (Anyone can watch you drive by. Anyone can drive along right behind you. And so on.)

So I see this as a NOOP in terms of security/privacy: it simply doesn't matter who owns/operates the cable/fiber/etc. plant, it's going to be tapped to the extend possible as soon as possible as much as possible anyway.

So if we're going to have to put up with that, and engineer security/privacy around it, we should at least get 10Mbps for $25/month in the bargain. Which is, by the way, about 18X better performance/price ratio than I have at the moment.)
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Anonymous Coward, 30 Oct 2014 @ 12:02pm

Yeah, after making Billions from it. They must be saying to each other: "Sweet deal, bro!"
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Show me the Money, 30 Oct 2014 @ 12:44pm

So the 100 Billion they got is gone?
I know yup.

Thank god you don't have fiber everywhere, what would you have bought for 100 Billion Dollars in Direct subsidies ?
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Derek Kerton (profile), 30 Oct 2014 @ 12:53pm

Bad Faith. Bad Business
This is too bad. As a guy who works with and advises many telcos, one of the key threats to their business these days is, obviously, Over The Top services.

One of the key defenses we advise them they have is...trust. Yes, trust. It turns out many people dislike their carrier, but still trust them. Doubt me? Consider this: How many people give telcos their credit card for their monthly bills? So this is demonstrated proof of a certain level of trust.

As Apple has shown with the iTunes store, then the App Store; Or has Amazon has shown with OneClick: A credit card on file, plus some trust can pay off in lower friction sales, and more revenue.

But here they are, eroding consumer trust at every opportunity. It saddens me, both because we are being ripped off, but also because I see companies frittering away one of their few remaining competitive advantages.

If continued, the trust they enjoy will only be at the level of "the devil you know"...which is just a notch above Nigerian 419 scammers.
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That One Guy (profile), 30 Oct 2014 @ 1:41pm

Re: Re:
A fitting punishment seems to be a fine x10 the amount of profit made from the violation. So if they scammed people and made 10 million from it, they'd owe 100 million. Scammed people and made 100 million, they owe a billion, and so on.

If the fines actually hurt, then they might actually work as a deterrent, but as long as they don't even match the gains, yeah, companies will just keep on scamming customers, because they know it's profitable, extremely so, to do so, even when they get caught.
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Anonymous Coward, 30 Oct 2014 @ 2:01pm

These fines are paltry. IMO, both companies should have been fined $10-20bn.
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Anonymous Coward, 30 Oct 2014 @ 2:09pm

Anyone who thinks Comcast and Verizon won't just trawl their database looking for over 65yr old customers and claw back this money by "accidentally" double-billing what they see as vulnerable/stupids has their head so far up their ass that they could give their own bowels a quick look-see for tumors...
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Anonymous Coward, 30 Oct 2014 @ 2:10pm

Re: Re: It's time to nationalize the infrastructure
Like the fiber connections don't already route through the NSA 'grey' rooms in verizon and comcast's HQ...
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John Fenderson (profile), 30 Oct 2014 @ 2:45pm

Re: Bad Faith. Bad Business
"How many people give telcos their credit card for their monthly bills? So this is demonstrated proof of a certain level of trust."

That's not an example of trust in the telcos. That's an example of trusting in the laws that provide you additional consumer protection when you use credit cards.
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Anonymous Coward, 30 Oct 2014 @ 3:14pm

Re: Re: It's time to nationalize the infrastructure
Ummmm....

We already have this. They're called toll roads. And some areas have toll lanes.
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Anonymous Coward, 30 Oct 2014 @ 4:01pm

yet, where are the charges for fraud?

If I was to take money from them under false pretenses, I would in Jail so fast it is not funny.

This is just more corruption at play in the USA
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Anonymous Coward, 30 Oct 2014 @ 5:38pm

Re:
they paid off multi million dollar bribes or is that fines. Just like the banks that got caught laundering money from criminals they got charged a fine and everything was aces. save they went right back to laundering money for criminals and terrorists.
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Anonymous Coward, 31 Oct 2014 @ 7:24am

Re: Bad Faith. Bad Business
Says the one who defends data caps.
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John Fenderson (profile), 31 Oct 2014 @ 8:08am

Re: Re: Re: It's time to nationalize the infrastructure
I know these exist in some parts of the nation (not mine, thank god), but I consider them to be an abomination as well.
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GEMont (profile), 1 Nov 2014 @ 5:10pm

When is a Scam is not a Scam? When its a business model.
I just love this scam!

1. Big Biz does a scam on the Public.

2. Big Biz pulls in a few billion from the scam.

3. Big Biz gets caught, usually because they got careless.

4. Big Guv takes them to court for their crime.

5. Big Guv fines Big Biz a few million bux.

6. Big Guv keeps the Vigorish and Big Biz walks.

7. The Public remains screwed out of the billions and Big Biz walks away with the lion's share of their scam proceeds and Big Guv gets a nice chunk of valuta for doing absolutely nothing.

Repeat from 1.

I would call this a business model.

---
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Jerry, 21 Feb 2016 @ 2:59pm

Re: Re:
I've almost gotten removed from their office for showing how they lied on their billing. The sales people lie to get you to sign on at Verizon. They tell us we will pay 19.99 for their new phone service. We get a bill for 75.00 after we already were told that they would waive the start up fee. That was was the "salesperson's" incentive to get us to drop Century Link and get Verizon home phone. I told them to put this phone and number in my wife's name separate from my cell. They say sure just sign here and it will be done. NOT!! It was like pulling teeth just to get that done. over half a year on the phone with different techs who said it is now done. The bill will be separate. It never happened and they kept charging the wrong account. You see on the books it looks great that they are charging all this "money" bogus or not. But it just burns the consumer and creates animosity towards the company when they lie like that. Lie and say "oh that's extra taxes added after the fact". Liars and cheats they collect loads with these little nickel and dime add ons. NOw Comcast is doing it. Now Comcast has a pay your bill machine just like Verizon. Look and see don't be a dumb sheep.
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