Senate Hearing Shows Cable Companies Routinely Overbill Customers, Do Little To Correct Errors

from the wrist-slaps-and-platitudes dept

If you’ve been distracted by something like a coma, you may have noticed that the cable industry has developed an atrocious reputation for poor customer service, built over a generation of regulatory capture, prioritizing growth over customer service, and just generally not giving much of a damn. By and large, a Congress slathered in telecom and cable campaign contributions has ensured that nothing much changes on that front, with most politicians taking every opportunity to in fact defend this dysfunctional status quo from innovation, competition, or change.

As such, it was marginally adorable to see Congress hold a hearing last week designed to deliver a few light wrist slaps to cable executives for their inability to seriously improve. Senators Rob Portman and Claire McCaskill simultaneously released a study (pdf) exploring how a number of large cable companies routinely overbill consumers, and do little to nothing to actually resolve such errors. In fact, a study released by the Senate found that Charter and its recently acquired subsidiary Time Warner Cable routinely overbill customers to the tune of around $7.2 million per year:

Between January and April 2016, Time Warner Cable overbilled customers nationwide an estimated $639,948. The Subcommittee projects that, in 2016, Time Warner Cable will overbill customers nationwide a total of $1,919,844. Charter has not yet completed the underlying work necessary to determine how much it has overbilled customers. But it has informed the Subcommittee that it overbilled customers by at least $442,691 per month.

What’s more, the study found that these two companies specifically have a habit of doing even less than other upopular cable companies (read: nothing) after customers were overbilled:

During the six and a half year time period covered by the Subcommittee?s investigation, Time Warner Cable and Charter did not automatically refund or credit customers for equipment overcharges they discovered. By contrast, Comcast and DirecTV provided full refunds to overcharged customers, and Dish?s sophisticated billing system is designed to prevent these types of issues from occurring in the first instance.

And as a reminder: Time Warner Cable and Charter just merged, potentially creating a Voltron of errant overbilling. And thanks to binding arbitration mouseprint now buried in every cable and broadband contract under the sun, overbilled customers can’t technically sue.

While both Time Warner Cable and Charter have promised to implement systems to avoid overbilling customers moving forward, such inquiries are usually geared toward scoring some cheap political brownie points among cable-loathing constituents, and rarely result in much of a follow-up (and there could be follow-up, since much of this technically constitutes false advertising). Still, to her credit, McCaskill also touched on the practice of misleading below-the-line fees used by cable operators to covertly jack up the advertised rate of services post-sale:

“We found that customers are being charged a host of fees that are not included in advertised pricing, some of which are for programming that used to be included in a customer?s video package. We also found that, just as many customers have long believed, some of these fees, like the HD and DVR service fees, aren?t a true reflection of the cost to the company of the service, but rather are based on the revenue goals of the company, and the price a customer is willing to stomach.?

Again, that has been a problem for years in both cable and telecom, thanks in part to Senators and regulators that have a nasty habit of pretending it’s not happening. From “broadcast TV fees” that bury the cost of programming below the line, to bizarre, nonsensical charges like “internet cost recovery fees” — most of the “innovation” in telecom and cable these days occurs in the realm of adding misleading charges to your bill, not in improving actual service or support.

A second study presented at the hearing goes into more detail, examining how cable providers also make it difficult if not impossible to comparison price shop (another benefit of below the line fees). McCaskill even offered up a recording of her recent call with DirecTV, made after she realized the company for years had been charging her an $8 per month “protection plan” fee she neither wanted nor asked for.

“I said, ‘well, were you going to tell me this?’ They said, ‘no you have to call in and ask,'” McCaskill said at the hearing (you can find a full video of the hearing here). “If I hadn’t called in and asked, that $10 could still be on my bill today based on the billing practices of the companies represented at this hearing.”

And while cable’s best and brightest spent plenty of time at the hearing claiming they’ve learned the error of their ways and are doing everything under the sun to change, that’s the same promise they’ve given every year for more than fifteen years. Surely this wrist slap will be the wrist slap that sends them running back to the drawing board with a heartfelt desire to change?

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Companies: comcast, directv, time warner cable

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Comments on “Senate Hearing Shows Cable Companies Routinely Overbill Customers, Do Little To Correct Errors”

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17 Comments
That One Guy (profile) says:

Telling priorities

Cable companies overbill their customers on a regular basis: They get called in for one hearing to discuss the matter.

FCC passes passes net neutrality rules in an attempt to curb some of the more blatant abuses of telecom companies regarding the treatment of their customers: They get called in for multiple hearings to ‘investigate’ the matter.

Mason Wheeler (profile) says:

You want companies to stop doing stuff like this? Make it unprofitable to!

Pass a law that says that any company found to have obtained money through illegal business dealings faces a mandatory minimum penalty of 100% of the money obtained. You could even give it a snappy, memorable name. “The Crime Does Not Pay Act” comes to mind.

Paul Brinker (profile) says:

Re: Re:

This never works, mostly because people use plausible deniability to protect themselves.

The VP said he wants 5% more income this year, he does not care how.

The AVP said that it might be worth looking at bills for people who are doing things we done condone and adding new fees for those actions.

The Manager said, “Ok guys, we need to add more fees”.

The guy on the line said, “Yes Sir”.

No single person said to bill people for fake services, or otherwise break the law. Each person technically knew that there orders would result in this solution because the VP who started the chain has nothing to do with new customer acquisition or package up-selling, hes only in charge of billing.

Welcome to corporate governance 101.

That One Guy (profile) says:

Re: Re:

Prepare to be disappointed then. Though I’m not entirely sure offhand I’m at least fairly positive that the matter made it all the way up to the US Supreme Court, which found no problem with the idea that someone could be prohibited from exercising their ability to sue a company via a binding arbitration clause.

The companies involved would of course argue that not a single consumer protection law was violated in their repeated overbilling, it was just ‘a few minor mistakes’, and they’d be happy to clear up the matter for the customers, and if the customer really feels wronged they are completely welcome to take the matter up with the arbitration court chosen by the company which is of course completely neutral and has no reason whatsoever to consistently rule on a given side.

As such no need to get any laws or lawsuits involved, nothing to see here, move along.

Anonymous Coward says:

Quit comcast a year ago, couldn’t be happier. The replacement internet service is faster and more reliable, their TV service might not be quite as good however its also less than 1/2 of what comcast charged.

Had a comcast salesperson try and convince me to move back “Oh we know we made mistakes and we have changed what would it take to get you back as a customer?”
“If you offered me free service for life, I don’t think I’d accept.” As I walked away.

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