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.

Filed Under: billing fraud, broadband, competition, ftc, subscriptions, tv
Companies: centurylink, comcast, cox, t-mobile

After Investigating Itself, CenturyLink Proclaims There's Just No Way It Committed Billing Fraud

from the trust-and-don't-verify dept

Lawsuits have begun to pile up for broadband provider CenturyLink, after a whistleblower revealed earlier this year that the ISP had been routinely over-billing its broadband customers for years. The whistleblower, who claims she was fired after bringing the problem to company management, said the company had a multi-year habit of consistently signing customers up for services they never ordered and didn't want. Of course that's on top of the routinely-misleading billing practices we see at most giant broadband providers, most notably the habit of making up completely bogus fees to jack up the advertised price post sale.

The whistleblower account was followed up by lawsuits from several state attorneys general, who say they discovered ample evidence that misleading pricing and overbilling was a consistent occurrance. An investigation by Minnesota AG Lori Swanson, for example, found numerous examples where customers were overbilled -- yet CenturyLink refused to fix the problem -- even when customers had the ISP's original promises in writing.

But worry not! CenturyLink last week issued a press release stating it had investigated itself, and found that company executives were completely and utterly innocent of any wrong doing. According to CenturyLink, the company constructed a "special committee" filled with CenturyLink board members, who collectively dug through 9.7 million documents, 4.3 terabytes of billing data consisting of over 32 billion billing records -- and interviewed 200 current and former Company employees. They found, impressively, precisely what CenturyLink CEO Glen Post hoped they would:

"The Company accepts the Special Committee's findings and conclusions. The investigation confirmed my long-held belief that there was no fraud or wrongdoing at the Company and that cramming was neither widespread nor condoned. However, we know there have been times when we haven't provided our customers the experience they deserve. We have identified a number of areas where we can improve the customer experience and have already made significant progress in addressing those areas."

That's in stark contrast to what whistleblowers and numerous state investigations have so far discovered. So letting actual, independent third-party investigations determine guilt or innocence seems kind of important. What did the investigation find? It found that if there was a problem, it was due to the fact that CenturyLink's billing and pricing was somehow confusing customers:

"Some of the Company's products, pricing and promotions were complex and caused confusion, and the resulting bills sometimes failed to meet customer expectations. Additionally, limitations in the Company's ordering and billing software made it difficult to provide customers with estimates of their bills and confirmation of service letters that reflected all discounts, prorated charges, taxes and fees."

Of course CenturyLink would have you believe that this confusing pricing just magically materialized by itself accidentally. In reality, large ISPs consistently employ confusing pricing in order to make direct price comparisons between ISP bundles all but impossible. It's standard practice. Centurylink also has a nasty habit of (apparently accidentally) imposing completely misleading fees to jack up the advertised price of service. Take CenturyLink's $4 per month "Internet Cost Recovery Fee," for example, which CenturyLink explains as such on its website:

"This fee helps defray costs associated with building and maintaining CenturyLink's High-Speed Internet broadband network, as well as the costs of expanding network capacity to support the continued increase in customers' average broadband consumption."

Of course that's bullshit, and tackling the "costs of expanding network capacity" is what your regular bill is for. What the fee does accomplish is it lets CenturyLink advertise one price, then charge something else entirely. It's something broadband providers learned from the airline, banking, and other industries, and with limited competition, the "free market" mysteriously never auto-corrects the problem. And neither the FCC nor FTC have ever deemed this fairly blatant false advertising via bogus fees (which take many forms) worthy of serious inquiry.

And that's with the FCC's net neutrality rules in place, which at least required that ISPs clearly document all of this hidden nonsense to consumers at the point of sale. With those requirements about to die, and both federal and state oversight of ISPs about to be obliterated, you can expect an already-bad problem to only get worse. It's another example of how the death of net neutrality is going to have wide-reaching negative effects that go well beyond our traditional understanding of net neutrality violations. Of course if you like being nickel and dimed by your broadband ISP, the future's looking bright for you indeed.

Filed Under: billing fraud, fraud, overbilling, scams, self-investigation
Companies: centurylink