Comcast Tries, Fails To Kill Lawsuit Over Its Hidden, Bogus Fees

from the I-see-what-you-did-there dept

Mon, Aug 7th 2017 6:29am — Karl Bode

Cable TV and broadband providers have created an art form out of advertising one price, then charging you something else entirely when your bill actually arrives. They accomplish this via the addition of sneaky below the line fees, which allow them to covertly raise rates while proudly crowing that they've keep their base rates the same. Some of these fess are downright obnoxious in how fraudulent they are, like CenturyLink's "internet cost recovery fee." Others, like the increasingly common "broadcast TV fee," simply take a part of the cost of doing business (in this case programming), then bury it below the line to jack up the advertised price.

Comcast, an expert at this particular behavior, was sued for the practice late last year. The lawsuit specifically focused on Comcast's use of the broadcast TV fee, which has quickly ballooned for Comcast customers from $1.50 per month to $6.50 since introduction, and the "Regional Sports Fee" that has quickly jumped from $1 to $4.50 since 2015. The lawsuit was also was quick to point out that when people call Comcast to complain, the company's support reps often lie and insist that the fees are somehow government mandated to dodge accountability.

Amusingly, the company responded to the suit by trying to claim that covertly jacking up their advertised rate was just their way of being "transparent" (nothing quite says "transparency" like not knowing what your bill is going to be until after you've signed up for service). Comcast subsequently filed a motion to dismiss, arguing that the company's order submission process doesn't technically create a binding contract with its customers, and that customers agreed to pay the fees by agreeing to the Comcast "Subscriber Agreement" and "Minimum Term Agreement."

But US District Court Judge Vince Chhabria recently shot down this argument in a ruling that will keep the suit alive, for now:

"The motion to dismiss the breach of contract claim is denied. The plaintiffs have alleged the existence of a valid contract, which was created when [Comcast customers Dan] Adkins and [Christopher] Robertson submitted their order for Comcast services through Comcast's website. It is plausible to infer from the complaint that, by clicking "Submit Your Order," Adkins and Robertson agreed to pay Comcast's advertised price, plus taxes and government-related fees, in exchange for the services Comcast offered them. It is also plausible to infer from the complaint that Comcast breached its agreements with the plaintiffs when it sent them bills charging them Broadcast TV and/or Regional Sports Fees (alleged to be neither taxes nor government-related fees) in excess of the agreed-upon price, and when it subsequently sought to raise the amount of the fees."

Judge Chhabria also disputed Comcast's claim that users technically agree to pay these fees by agreeing to the Comcast subscriber agreement, which only references "permitted fees and cost recovery charges," and not these additional surcharges Comcast appears to have hallucinated out of whole cloth:

"As to the Minimum Term Agreement, the plaintiffs plausibly allege that they never saw this agreement at the time they submitted their order for services and have never consented to it," the judge wrote. "Whether the plaintiffs had access to this agreement at the time they submitted their orders for services, or whether they subsequently consented to it, are disputed factual questions more appropriate for summary judgment."

Comcast's being additionally disingenuous here in part because as the owner of NBC, it very often is the broadcaster, and often owns the regional sports networks in question. Granted Comcast's use of covert fees to covertly jack up the cost of service is something that has plagued the broadband and TV sectors in particular for years, though regulators and lawmakers have consistently turned a blind eye to the practice. Similar suits have been filed against Charter Communications, at which point the nation's other extremely-disliked cable provider tried to claim it was simply providing an amazing consumer benefit.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: cable tv, class action, fees, hidden fees, truth in advertising
Companies: comcast

28 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

aerinai (profile), 7 Aug 2017 @ 6:11am

Comcast Fix is Simple... Slightly Different Verbiage
While I do have high hopes for this case, it will not stop them from these practices. Their lawyers will just change the agreement to say 'All Taxes and Fees' instead of 'Taxes and Government Related Fees'. Surprised their lawyers missed that one.
[ link to this | view in thread ]
David, 7 Aug 2017 @ 7:05am

Amusingly? You didn't get the memo?

Amusingly, the company responded to the suit by trying to claim that covertly jacking up their advertised rate was just their way of being "transparent" (nothing quite says "transparency" like not knowing what your bill is going to be until after you've signed up for service).

Uh, don't you keep up with Newspeak? At the time of the suit, Obama's administration was the "most transparent administration in history".

And make no mistake "not knowing what your bill is going to be until after you've signed up for service" is a pretty good description of how compaign agenda and presidential execution by Obama matched.

In contrast, Trump is every bit as bad as his campaign suggested.

The telcoms just haven't caught up yet to the new American way of honestly stating "we are going to screw you over and you'll lick it up or else".

They will.
[ link to this | view in thread ]
JoeCool (profile), 7 Aug 2017 @ 7:39am

Speeling
fess -> fees
[ link to this | view in thread ]
McFortner (profile), 7 Aug 2017 @ 7:40am

Just wait for it.
You'll soon see somebody getting hit with a massive fee because they talked about the massive fee, all because it is a violation of the service contract.

5. 4. 3...
[ link to this | view in thread ]
limbodog (profile), 7 Aug 2017 @ 7:57am

I have nothing intelligent to add
But I look forward to the day that Comcast is mounted on a wall like Blockbuster is today - a memento of an extinct species.
[ link to this | view in thread ]
Anonymous Coward, 7 Aug 2017 @ 8:07am

So, if, by comcast's reasoning, they've agreed to pay whatever fees comcast can come up with, what's to stop comcast from charging them a "Our CEO would really like a new yacht fee: $4000"? Or a "So much money, now we own your house" fee?
[ link to this | view in thread ]
afn29129 (profile), 7 Aug 2017 @ 8:49am

Contract
"..arguing that the company's order submission process doesn't technically create a binding contract with its customers.."

That should be easy to prove or disprove. Let someone place an order and then try and cancel shortly afterwards. Surly Comcast then argue that the contract has been made, was made when the submit button was pressed, and that any attempt to backout will result in customer's credit rating being dinged and bills sent to a collection agency.
[ link to this | view in thread ]
Andrew Cook (profile), 7 Aug 2017 @ 8:59am

Reading Comprehension
Judge Chhabria also disputed Comcast's claim that users technically agree to pay these fees by agreeing to the Comcast subscriber agreement, which only references "permitted fees and cost recovery charges," and not these additional surcharges Comcast appears to have hallucinated out of whole cloth:

That's not what the judge said, only that this isn't the right time to deal with those issues.
- Motion to Dismiss: The case needs to go away because there is something procedurally or facially wrong with it. ← The judge is ruling here.
- Motion for Summary Judgement: The case needs to go away because even if what the other guy says is 100% true I'm still okay. ← The judge said that whether the plaintiffs agreed to the contract should be determined here.
- Judgement on Merits: The case needs to go away because I'm right and the other guy's wrong. ← The judge implied that whether the contract lets Comcast pile on the charges should be determined here.
I would really, really love for a judge to rule that those fees are barred, since that would open the door to all sorts of legal fun for them, but that's not what Judge Chhabria ruled yet. We'll just have to keep waiting.
[ link to this | view in thread ]
Anonymous Coward, 7 Aug 2017 @ 9:19am

Re: Amusingly? You didn't get the memo?
Thats a pretty crap strawman. Even by today's standards.
[ link to this | view in thread ]
NeghVar (profile), 7 Aug 2017 @ 9:22am

Re:
and Comcast really could do that. Internet access is not protected from price gouging or artificial inflation like gasoline, electricity, water, and some other "necessities" are.
[ link to this | view in thread ]
Anonymous Coward, 7 Aug 2017 @ 9:58am

The next fee....
The next fee will be the "Judge Chhabria" fee. It will be collected so that Comcast can either pay off or bribe the Judge to "see things" Comcast's way.
[ link to this | view in thread ]
Anonymous Coward, 7 Aug 2017 @ 10:23am

Re: Reading Comprehension
What's the error? The judge has made these fees the subject of (further) disputation. You're right that the fees haven't been rejected outright, but they're surely in dispute. ("Hallucination" wasn't the judge's wording, and the article is reasonably clear about it.)
[ link to this | view in thread ]
Anonymous Coward, 7 Aug 2017 @ 10:56am

Bankers and Car Dealers
Sounds like Comcast has been taking lessons from the banking and car sales industries. They've still got a ways to go, though.
[ link to this | view in thread ]
orbitalinsertion (profile), 7 Aug 2017 @ 11:03am

Re: Just wait for it.
Some ISPs have claimed, in their TOS, that they can take action against the customer for negative comments.
[ link to this | view in thread ]
orbitalinsertion (profile), 7 Aug 2017 @ 11:07am

Yeah, that "transparent" like in some developer and UX -speak, as in "transparent to the end user". Meaning what happens is totally opaque, don't worry about what is happening, you don't need to be "distracted" by it. Also, you have no way to identify or fix problems, at least not natively (and you may be lucky to identify the problem using other tools). Suck it, customer.
[ link to this | view in thread ]
David, 7 Aug 2017 @ 2:23pm

Re: Re:
Internet access is not protected from price gouging or artifical inflation but still is not exempt from basic contract law. Billing a different amount than advertised is not legal even in unregulated industries.
[ link to this | view in thread ]
Anonymous Coward, 7 Aug 2017 @ 3:46pm

Re: Amusingly? You didn't get the memo?
wtf do trump and obama have to do with a story about comcast?
[ link to this | view in thread ]
Anonymous Coward, 7 Aug 2017 @ 3:47pm

Re: Re: Just wait for it.
They can take action if they so desire ... doesn't mean they will get any traction though.
[ link to this | view in thread ]
Anonymous Coward, 7 Aug 2017 @ 3:50pm

Re: Re: Re:
and you are able to get out of your contract when they break it by increasing the price which was set in the "contract".

The whole idea of requiring a contract for this type of service is ridiculous.
[ link to this | view in thread ]
Anonymous Coward, 7 Aug 2017 @ 3:55pm

Re: Contract
Where is the signature?
What about the many laws which allow the customer a few days to a week to cancel a "contract" without consequence?

Allowing a corp to claim contract with a person based simply upon a click from an IP addr which may or may not be spoofed ... is problematic at best.
[ link to this | view in thread ]
guest, 7 Aug 2017 @ 6:22pm

Same here
Comcast did this to me as well: they tacked on a $20 cable hookup fee (for a cable that was already connected by the installers admission), billed for 2 months in advance, and also tried to hit me up for a jack installation fee. Just because nobody else has broadband for sale in this market.
[ link to this | view in thread ]
techclean, 7 Aug 2017 @ 6:42pm

just their way of being "transparent" ...
Comcast is famous for mocking your intelligence by 'gaslighting' (stating the total opposite of the obvious reality.) This is a form of psychological warfare used by sociopaths; the object is to discourage you by attempting to mock and humiliate you to make you feel powerless.

"A study published online in Personality and Individual Differences, found that individuals with the Dark Triad traits (narcissism, psychopathy, and Machiavellianism) are more likely to have studied business and economics."

http://www.medicaldaily.com/what-college-courses-do-psychopaths-choose-dark-triad-personality-most- likely-416812

“Americans pay so much because they don’t have a choice. Left to their own devices, companies that supply internet access will charge high prices because they face neither competition nor oversight.”

—Susan Crawford, author of 'Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age')

In Britain, regulators forced the incumbent monopolies to lease their networks to competitors at cost, which enabled new providers to enter the market and brought down prices dramatically.

"What we need is a new competition policy that puts the interests of consumers first, seeks to replicate what other countries have done, and treats with extreme skepticism the arguments of monopoly incumbents."

http://www.newyorker.com/news/daily-comment/we-need-real-competition-not-a-cable-internet-monopoly
[ link to this | view in thread ]
AnonCow, 8 Aug 2017 @ 7:15am

Newest Comcast Fee
"Litigation Expense Recovery Fee"
[ link to this | view in thread ]
Anonymous Coward, 8 Aug 2017 @ 7:17am

Re: The next fee....
Or to increase the size of the industry lobbyist slush fund that will go to Ajit Pai when he leaves office and dismantling any effective FCC management of the industry.
[ link to this | view in thread ]
The Wanderer (profile), 9 Aug 2017 @ 8:42am

Re: Amusingly? You didn't get the memo?
To be fair, it's possible to see what they mean by this.

The claim is that by splitting out this part of the cost into a separate line item, rather than lumping it together with other costs into a single big number, they are being transparent about where the money the customer is being charged goes.

Where it becomes disingenuous is placing this separate line item "below the line", so that it ends up being on top of the advertised price, rather than having all such universally-applicable items be enumerated "above the line" and then summed up into the advertised price.
[ link to this | view in thread ]
Steve Goldfield, 1 Jan 2018 @ 3:36pm

Comcast bogus billing
Comcast tried to bill me to rent a modem I purchased myself. When I got fed up, I closed my account and switched to AT&T. They then bill me for not returning a router. The only router I use I bought myself. And they billed me an early termination fee even though I had been a customer for years. So, I filed an FCC complaint. Three days later, they asked what they would have to do to have me drop the complaint. I said that if they took off those bogus charges, they would owe me $7.50. They sent me a check, and I dropped the complaint. Today, I got them to take four premium channels never requested from my 99-year-old mother's account. I also asked Consumer Reports to investigate them. This is a huge scandal.
[ link to this | view in thread ]
butterfly fly away, 4 Jul 2018 @ 8:05am

Re: just their way of being "transparent" ...
As long as the politicians are getting "kickback" or donations from the lobby people that run Washington we will never see anything that puts "consumers first"! They are allowing monopolies in almost every consumer service available.
[ link to this | view in thread ]
butterfly fly away, 4 Jul 2018 @ 8:40am

Re: Re: Amusingly? You didn't get the memo?
Disingenuous or not they just added another dollar to this "broadcast fee" bringing it to $8 a month, $96 a year per customer. So obviously they aren't worried about this suit or any other suit regarding the ways they take advantage of the consumer. They're just laughing on the way to the bank knowing that even if they lose they win because as you can see it takes years for them to be held accountable, if ever, and they have had our money to use in the meantime. So they gamble and it looks like they win more than they lose. The deck is stacked against the consumer and the politicians are dealing out the cards.
[ link to this | view in thread ]