Comcast Gets $9 Million Fine For Tricking Customers With 'Worthless' Protection Plans

from the relative-wrist-slap dept

In August of 2016, Washington State sued Comcast, claiming the cable giant had long been offering consumers a "service protection plan" that was barely worth the paper it was printed on. According to the Washington State AG, the plan promised consumers "comprehensive" protection for all repairs, service calls, maintenance of inside wiring and customer-owned equipment, and "on-site education about Comcast products" for $5 more per month.

But the AG investigation found Comcast repeatedly misled consumers about the scope of the plan, and routinely charging consumers for repairs and service that should have been included under the plan's umbrella. Comcast misled more than 500,000 Washington state consumers in this fashion, and the AG's original lawsuit (pdf) noted that Comcast had even created a clear "service code" for techs to use when they wanted to incur charges for service that should have been covered under the plan.

Fast forward to last week, when a ruling in King County, Washington court (pdf) found that Comcast also technically violated the law more than 445,000 times when it charged tens of thousands of Washingtonians for this worthless Service Protection Plan -- without first obtaining their consent. From the full AG announcement:

"The court found that Comcast added the SPP to the accounts of 30,946 Washingtonians without their knowledge, and did not tell an additional 18,660 Washingtonians the true cost of the plan. The court ordered Comcast to refund affected consumers, and pay 12 percent interest on the restitution. The amount of restitution is unknown at this time, but is expected to be significant. The court ordered Comcast to issue the refunds within 60 days and report to the state on the specific details and amounts."

Comcast's little gambit was certainly profitable: the court ruling declared that Comcast netted more than $73 million in errant fees over a five-year period by signing up customers for the worthless service plan they never asked for. Court recordings even documented how Comcast would sign up customers for the plan even when they clearly rejected Comcast representatives' pitches.

Comcast, whose historically terrible customer service is already the stuff of legend, will be required to refund nearly 50,000 customers and pay a $9.1 million fine to make up for years of misleading behavior. And while that sets a Washington State record, that still likely falls well short of the total net profit Comcast made from scamming Washington State consumers. And that's of course just Washington State; if Comcast was doing this in Washington, it was likely doing it in other states, yet no other states have pursued investigations into the behavior.

In the wake of the federal government abdicating most of its authority to protect consumers from giant telecom monopolies that face little organic competition, states have tried to step up their game when it comes to consumer protection. But it hasn't been easy; with the Ajit Pai FCC's help, the telecom lobby has tried its damnedest to ban states from being able to hold giant ISPs responsible. That gambit hasn't been working out all that well -- at least in states that can be bothered to actually still care about consumer protection.

Filed Under: fcc, scams, service protection plan, washington, wireless protection plan
Companies: comcast

Comcast Busted For Signing People Up For Services They Didn't Want, Never Asked For

from the pay-more-for-nothing dept

Earlier this year Washington State sued Comcast for routinely ripping off its customers. The original complaint (pdf) argued that Comcast violated Washington state’s Consumer Protection Act (CPA) by misrepresenting its "Service Protection Plan," which lets users pay a $5 per month additional fee to cover "all" service calls. But the investigation found that Comcast not only over-stated what the plan covered, but routinely signed customers up for the plan who never asked for it, resulting in an additional $73 million in subscription fees over the last five years for what the State AG called a "near-worthless" plan.

The original complaint found that Comcast reps repeatedly sold the plan as being "comprehensive," covering all service calls, including those related to inside wiring, customer-owned equipment connected to Comcast services and "on-site education about products." But when customers subscribed to the plan called up thinking they'd then get a break from Comcast on service charges, the company would routinely bill customers anyway for all manner of services and repairs that should have been covered under the plan.

Amusingly, last week while Comcast was busy celebrating the vote to kill net neutrality, Washington Attorney General Bob Ferguson announced that his office would be amending and expanding its original complaint. According to investigators, the width and breadth of Comcast's protection plan scam went far deeper than investigators originally realized. After reviewing company interactions with subscribers, the AG found that "Comcast may have signed up more than half of all SPP subscribers without their consent," and in numerous instances charged customers for the SPP plan after telling them it was "free."

Ferguson's office claims they were "shocked" by the level of deception that occurred at Comcast:

"This new evidence makes clear that Comcast’s conduct is even more egregious than we first realized,” Ferguson said. “The extent of their deception is shocking, and I will hold them accountable for their treatment of Washington consumers."

If you've watched as Comcast gleans millions of dollars from unnecessary usage caps, extremely misleading fees (which it's also being sued over), or surcharges thanks to its monopoly over cable boxes, none of this should be remotely shocking. Being misleading is a rite of passage in the broadband sector, where captive customers, a lack of competition and blindly loyal state and federal regulators and lawmakers means accountability of any sort is frequently in short supply (though this is precisely the sort of stuff many falsely believe "the market" will magically take care of on its own accord).

And it's all about to get much worse. As we've well established, the Trump administration is gutting most meaningful FTC and FCC oversight of uncompetitive duopolies companies like Comcast. Worse, Comcast and Verizon have successfully lobbied the FCC to block any states that try to hold these ISPs accountable on the net neutrality, privacy, or errant billing fronts. All while the already flimsy competition Comcast faces in many of its markets weakens further thanks to telcos being unwilling to upgrade their networks. In other words, if you thought Comcast's behavior was bad in the past, you likely haven't seen anything yet.

Filed Under: scams, service protection plan, washington
Companies: comcast