Comcast Sued For Misleading Fees It Claims Are Just Its Way Of Being 'Transparent'

from the transparently-obnoxious dept

In addition to vanilla price hikes and usage caps and overage penalties, ISPs have spent the last few years borrowing a tactic from the banking industry to covertly jack up the advertised price of broadband service: the completely nonsensical hidden fee. From CenturyLink’s $2 per month “Internet Cost Recovery Fee” to Fairpoint’s $3 per month “Broadband Cost Recovery Fee,” such fees usually just hide some of the cost of doing business below the line, letting an ISP advertise one price, then charge something quite different at the end of the month.

Encouraged by the fact that the FCC can’t be bothered to police this behavior, a few years ago Comcast began charging its cable customers a “Broadcast TV fee.” At the time, Comcast proudly proclaimed it was just being “transparent” by taking a portion of the retransmission fees paid to broadcasters and putting it below the line:

“Beginning in 2014, we will itemize a portion of broadcast retransmission costs as a separate line item to be more transparent with our customers about the factors that drive price changes,” he said. ?In 2014, we will not increase the price of Limited Basic or Digital Preferred video service, and adjustments to other video service prices will be lower than they would have been without the Broadcast TV Fee.”

The problem with this logic is two fold. One, the money Comcast pays to broadcasters for programming is the cost of doing business as a cable company and should be included in the overall bill. Two, this is effectively little more than Comcast advertising a lower rate, only to shock users with a higher bill. It’s false advertising, which is about as far from being “transparent” with consumers as you can get. Yet again, you’d be hard pressed to see the FCC so much as mention this sort of behavior, despite occasional, breathless announcements that the regulator is very concerned about transparency in the cable and broadband sector.

Fast forward to this week, when eight plaintiffs filed a class action lawsuit against the cable giant alleging consumer fraud, unfair competition, unjust enrichment and breach of contract for trying to covertly raise rates while the users were supposed to be under a locked-in rate:

“Lead plaintiff Dan Adkins, of California, says Comcast started using “a shady backdoor way to increase prices” in January 2014. He says the company added a “newly invented” Broadcast TV fee to cable bills without clearly disclosing the price hike to customers or updating its advertisements to reflect the new prices. “Comcast not only charged the fee to new customers, but also added the charge to the bills of existing customers in violation of their contracts which had promised a flat monthly rate for the term of the contract,” Adkins says in the 79-page complaint.”

Like all Comcast pricing, the lawsuit also points out that Comcast has relentlessly raised the fee from $1.50 when introduced, to $6.50 per month this year, a 333% increase in just three years. And while FCC data makes it clear that programming retransmission fees are skyrocketing, again — that’s the cost of doing business as a cable company (also remember that Comcast NBC Universal is also a broadcaster). The lawsuit is also quick to point out that Comcast is among several cable companies that began charging regional sports fees last year. In Comcast’s case (as the owner of Comcast Sportsnet), the lawsuit notes how that fee was also bumped by 350% in just a few years, from $1.00 to $4.50 per month.

Trying to mislead customers by advertising one rate — then socking them with a notably higher bill — doesn’t seem like the actions of a company that repeatedly insists it’s dedicated to fixing some of the worst customer satisfaction ratings of any company, in any industry in America.

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Companies: comcast

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Comments on “Comcast Sued For Misleading Fees It Claims Are Just Its Way Of Being 'Transparent'”

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32 Comments
Anonymous Coward says:

Re: Re:

Don’t forget the $29.95 arbitration opt-out fee (must resubmit arbitration opt-out monthly and pay this fee for the benefit)
$5.95 itemized bill fee
$9.95 postage fee (waved if use paperless billing)
$9.95 paperless billing processing fee (waved if using paper bills)
$5.00 FCC lobby fee (Comcast will happily lobby on your behalf, using your money, to counter overreaching government regulation)

*note: all of these are made up but I fully expect them to appear.

DannyB (profile) says:

Re: Re:

I haven’t done, but am planning, to do the following instead.

Get a Tablo. It’s a DVR for an Antenna. But it does NOT plug in to your TV. Instead it plugs in to your Ethernet (or WiFi). You also have to provide your own USB pocket hard drive for the recordings. If you want program listings, there is a small charge (don’t remember how much, but less than a single TiVo).

To watch, you have to use your own device. An app for Android or iOS. Or an App on a Roku device. And they have a variety of client viewers. The beauty of this is that a Roku at ever TV not only gets you internet streaming, but recordings from your Tablo over your house local area net.

Again, I haven’t tried this yet, but it’s in my near future plans.

Anonymous Coward says:

I'm waiting for more hidden hardware fees

It is like whack-a-mole. If they are barred from putting the fees here they will just move these fees to “optional” internet hardware.

Like increase hardware rental fees the exact same amount. Then they can claim that since these are optional they are advertising the correct price. Or not include these fees in any promotional periods so the advertised promotional price is correct.

I am personally waiting for some executive to try to gain back some money from cord cutters who only buy internet from them and rent no hardware. Like a personal device fee for using a non-comcast rented modem/router. Or outright banning the use of personal modems and routers.

Killer_Tofu (profile) says:

Arbitration Clauses?

I would not be surprised to see judges toss these based on the “binding arbitration” clauses that are in many customer’s agreements these days. Courts really should have never recognized the arbitration clauses as they have been a massive way to undermine consumer’s at every turn. When many consumers in many markets do not have choices (I am looking at you broadband market), the arbitration clauses should be illegal to begin with. I can only hope that they go through the courts and don’t get tossed because of the contract’s horrible terms that people were forced to agree to.

Anonymous Coward says:

so its okay if you don't raise the fees?

Verizon does something similar. They tack on fees like a compliancy fee, which is obviously just a cost of doing business. This lowers their advertised rate. But Verizon has not been jacking up the fee like Comcast. It still shows they disrespect their customers. Can’t wait to see how this turns out.

Stan (profile) says:

Fee. Fight. Foe. Fap.

“Beginning in 2014, we will itemize a portion of business costs as a separate line item to be more transparent,” he said. “In 2014, we will not increase the price of Limited Basic or Digital Preferred video service. We will be instituting a toilet flush fee to reflect the fact that Comcast executives are full of crap and need to continually empty this crap to make room for new, exciting and innovative crap that is designed to make our valued customers’ experience even more crappy.”

jojo (profile) says:

Comcast

Comcast has also sneakily changed the term agreement on my account from 12 months to 24 months starting this past April 2016.

I always renegotiate my Comcast contract at the end of December (I have the choice of Comcast or AT&T in my neighborhood, so can play one against the other.

I also record all conversations with Comcast, so I have a record of what was said, what was promised.

Last December I negotiated my new 12 month contract, which I clearly demanded and was agreed to.

Yet come April 2016, my bill suddenly included a new statement, to wit:

“Term agreement applies
24 month term agreement on account. Visit
http://www.xfinity.com/myaccount for Details”.

Huh? Say what?

I get on the phone and have to go through the dweeb level and then two levels of management who all tell me that this is and was always there policy but it just wasn’t stated on the monthly bill and too bad but we can’t change it. I retort that I have a recording of the rep agreeing to a 12 month term and do you want me to call Comcast HQ and take it up with them? We go back and forth and finally the 2nd level manager says she can put a note on my account that it was 12 months but that they can’t remove the 24 month statement! I also have a recording of this call.

So I guess I will see what happens when I make my usual call at the end of December to to renegotiate.

I’ve been with Comcast for maybe 15 years but I will switch to AT&T in a heartbeat if they try to play hardball with me.

This is something that the FCC should look into and that should be included in this class action lawsuit!

Alice Wilkinson says:

Slimy dealings of Comcast

Just received my monthly bill, I no longer have a 12 or 24 month contract. It’s month to month.WELL on this bill because I needed a repair person. I now have a 24 month contract. I don’t think so, will call them later. Also it states that the Franchise Authority us the City of Peoria, that may or may not be something new, maybe that is their attempt at transparency.There is a new broadcast fee and their Regional sports fee, I don’t watch sports, many times I have requested that that be removed. Since I don’t speak Spanish, I’ve requested that be removed, “sorry can’t do that. I THOUROGHLY DETEST COMCAST.

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