The Cable TV & Broadband Sector Has A Nasty Billing Fraud Problem
from the sleazy-surcharges dept
As we've well discussed, the broadband and TV sector not only has some of the worst satisfaction scores in modern history. A lack of real competition has long allowed the industry to double down on all manner of bad behavior, whether that's net neutrality and privacy violations, or just unprecedentedly-awful customer service. But in recent years the industry has developed another nasty habit: billing fraud involving everything from falsely signing customers up for services they never ordered to entirely bogus fees designed to let companies falsely advertise lower rates.
T-Mobile was accused last year of signing users up for services they neither wanted nor ordered. Centurylink has similarly found itself in hot water for the same thing on a larger scale, the company now facing lawsuits in more than a dozen states for the practice. Washington State also recently sued Comcast, noting that the company not only routinely signs its customers up for a "Service Protection Plan" they never ordered, but consistently misrepresents what the plan actually does. You may or may not notice a pattern here.
Now Cox Communications, the nation's third-largest cable provider, is being accused of the same thing. A company whistleblower has accused company employees of repeatedly... you guessed it... fraudulently signing customers up for services they never ordered to nab bonuses they didn't actually earn:
Speaking only to the I-Team, two whistleblowers are convinced some Cox Communications sales reps in Northern Virginia are cashing in by signing up customers for services they didn't authorize. Why? To reach monthly bonuses of $12,000 or more.
"How far they're going for a commission payout, to affect thousands of people, it's a heinous, greedy act," said former Cox Communications employee Anna Wilkinson.
Wilkinson, a former sales rep, claims to have notified her bosses at Cox but says nothing changed.
That last bit, where the employee informs management and nothing changes, is par for the course in such stories. In the CenturyLink example above, a whistleblower states she brought the fraudulent behavior to company leadership and was promptly fired for it. The company then launched an investigation into itself and found, miraculously, that it had done absolutely nothing wrong. Lawsuits in numerous states, however, continue.
Also a recurring theme: complaints are routinely made to the FTC but pretty rarely result in action, especially if the company in question is a larger, deeper-pocketed or politically-powerful potential litigant. That is, you'll recall, the same FTC that's supposed to protect us all from net neutrality violations in the wake of the neutering of federal net neutrality law and FCC authority over such companies by the Trump administration.
Of course ripping off customers via erroneous subscriptions to never-ordered services is just part of the problem. The TV and telecom sector also has a nasty habit of imposing all manner of bogus fees to customer bills. Fees that are completely made up and buried below the line for one misleading purpose: to falsely advertise a lower rate at the point of sale, then jack up your monthly bill once you've already had services installed. And again, you'd be pretty hard pressed to find a regulator or lawmaker from either party willing to do much about it.
On the TV side of the equation, this is likely only to result in greater cord cutting as users flock to cheaper, less dysfunctional streaming competitors. But given the rise of regulatory capture and waning competition in the broadband sector, it's a problem that's pretty clearly not going away anytime soon.
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: billing fraud, broadband, competition, ftc, subscriptions, tv
Companies: centurylink, comcast, cox, t-mobile
Reader Comments
Subscribe: RSS
View by: Time | Thread
HOW IN THE NAME OF ZEUS ARE OUR GROCERY STORES MORE REGULATED THAN OUR TELECOMMUNICATIONS INDUSTRY?
[ link to this | view in thread ]
Re:
[ link to this | view in thread ]
Re:
[ link to this | view in thread ]
[ link to this | view in thread ]
[ link to this | view in thread ]
Re:
Certainly not in my state.
Also, if you return a defective product to them, most will replace or refund the item, but there is no penalty for them having sold you a defective item in the first place. However, if they return a defective payment (check) to you, not only do you have to make it good (no just returning the purchased item) but there is an additional statutory $35 "returned check fee" that you owe them. And they don't even have to come to your home to make the return. I want an extra $35 for every defective product I return to them.
[ link to this | view in thread ]
While we're on the subject...
[ link to this | view in thread ]
[ link to this | view in thread ]
Same old, same old...
They'll lose in court, be fined less than two million dollars, and promise never to do it again.
Of course, they made half a billion on the scam, so two million is less than pocket change.
[ link to this | view in thread ]
Re:
[ link to this | view in thread ]
more of the same
[ link to this | view in thread ]
Filed Under:
[ link to this | view in thread ]
Re: Business as usual
Despite my complaint, the "mistake" in sticker placement did' not change, although my patronage did, as in goodbye.
I gave up on cable and phone cramming (just making it up as they go along) scams years ago and in the process have saved thousands of $.
Email and Post Office still works.
[ link to this | view in thread ]
A match made, well not in heaven
I mean, how is the customer going to distinguish a bogus fee (for some miraculous reason legal) from a bogus service (illegal because inflicted by individual sales reps rather than higher up in the hierarchy)?
How is the customer supposed to distinguish between a "fuck you" fee and a "screw you" fee, between systematic fraud and individual fraud? It just does not make sense to allow one but not the other. And the solution, surprise surprise, is not to allow either.
[ link to this | view in thread ]
Re: Re:
Is that really statutory? (citation needed. I'm sure they'll charge it; I thought it was a bank-invented fee.)
[ link to this | view in thread ]
Re:
Set the fine at 100% of what was made minimum, with the amount only able to increase, never decrease, depending on severity of the actions.
If the absolute best-case-scenario was that the company would break even(and the base fine would only ever be applied for something that was completely unintentional and couldn't have been reasonably foreseen), with malicious acts costing even more, then they'd pay attention.
[ link to this | view in thread ]
Re: Re:
What you propose would very probably work fine for the companies which are biggest and most inclined to offend in this way, although even they may not necessarily keep spare cash on those scales.
But it would also probably wind up destroying smaller companies, even in cases where the "completely unintentional and couldn't reasonably have been foreseen" scenario would lead to only that base fine being imposed.
If you can find a way to scale it back enough to account for that, while still maintaining penalties against the more egregious offenders at a suitably yeah,-they'll-feel-that level, I'm all for the proposal.
[ link to this | view in thread ]
Re: Re:
Top this with the bank will also hit you with the insufficient fees.
[ link to this | view in thread ]
Re:
I don't think this applies so much to cell phone companies but the cable industry generally gives one company exclusive access to a given area which eliminates any motivation for good customer service or downward pressure on costs.
Because of this, their policies and often attitudes of individual reps seems reflect an attitude that customers are nothing more than a money garden and not actually people.
I do not know the nature of individual company contracts to areas- whether they are negotiated with municipalities or whatever, but the end user doesn't seem to have much if any input in the process- if there's even a renewal aspect to the arrangement.
Whatever laws governing this sweetheart arrangement are most likely the result of heavy lobbying with government officials whose own track record reeks of the same utter contempt for the monkeys in the money garden. We are just things to them and nothing more.
[ link to this | view in thread ]
Re: Filed Under:
[ link to this | view in thread ]
Re: Re: Re:
http://www.statutes.legis.state.tx.us/Docs/BC/htm/BC.3.htm#3.506
[ link to this | view in thread ]
This whole thing is made worse by the push by service companies to force customers into both paperless billing and auto-pay. Makes it easier to tack on a few extra charges and hope the customer won't bother to attempt to login, work past the 'time to change your password prompts so they can check the bill and auto-pay means turning off the payments requires several steps beyond the former no action needed to stop sending checks.
[ link to this | view in thread ]
The Cable TV & Broadband Sector Has A Nasty Billing Fraud Proble
As has already been pointed out, grocery stores are more competitive. If the local A&P renders bad service I have three or four other choices. To switch cable companies I must relocate.
RESPONSE: By the same token, grocery store suppliers are more competitive. If a store doesn't like one supplier's lettuce, it can buy lettuce from another supplier.
But a cable company doesn't have that option. If the cable company wants to carry ESPN there is only one source: ESPN.
JOHN: I don't think this applies so much to cell phone companies but the cable industry generally gives one company exclusive access to a given area which eliminates any motivation for good customer service or downward pressure on costs.
RESPONSE: The "cable industry" doesn't "give one company exclusive access to a given area"; the local franchise authorities do. Every cable company offering service must obtain a franchise from the local government -- typically a municipal government by may be a county government or a group of two or more local governments operating under an interlocal agreement.
Every franchise agreement I've ever seen purports to encourage two or more companies to build systems. But it's economically impossible to operate two cable systems in the same geographic area. Certainly no bank would ever finance such a business plan. Such a plan would double the construction costs, but the revenue necessary to amortize that debt would be cut by half.
JOHN: Because of this, their policies and often attitudes of individual reps seems reflect an attitude that customers are nothing more than a money garden and not actually people.
I do not know the nature of individual company contracts to areas- whether they are negotiated with municipalities or whatever, but the end user doesn't seem to have much if any input in the process- if there's even a renewal aspect to the arrangement.
RESPONSE: As I noted above every cable TV company operates under a franchise agreement with the local franchise authority. Every citizen has a right to participate in the franchising process. Get a copy of the franchise agreement and check it for yourself. You should be able to get a copy from the cable company, from your local city/county clerk, or from your local library. Every cable TV company is required to maintain a "public inspection file"; ask the cable company to let you review the public inspection file.
JOHN: Whatever laws governing this sweetheart arrangement are most likely the result of heavy lobbying with government officials whose own track record reeks of the same utter contempt for the monkeys in the money garden. We are just things to them and nothing more.
RESPONSE: Get a copy of the franchise agreement and read it! Attend city council/county board meetings when cable TV is on the agenda.
- Neal McLain, Retired Cable Guy.
[ link to this | view in thread ]
Re: Same old, same old...
[ link to this | view in thread ]
[ link to this | view in thread ]
You are right, the problem is often that few people control the niche. But there is another mistake. I noticed that now many companies use cheap or low-quality billing software. How can you protect all the data if the program does not provide it. My legal company ordered our own billing software developer https://www.timesolv.com/legal-billing-software/ and we never encountered such problems or fraud
[ link to this | view in thread ]
Direct tv shut off my service after i paid 200 of a 400 bill. After a week. On social security a widow. Was going to pay the rest next month. 199 of it was false charges. Could not pay 400 up front. Says they want all of it Now! And i have a contract!!! So do they. Cant give them all of my money!!! I never ordered extra channels nothing. Jumped my bill up $30 a month for nothing. Added false charges. Extortion.
[ link to this | view in thread ]