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.


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  • identicon
    Anonymous Coward, 13 Jul 2018 @ 6:59am

    Perhaps this is true for others but in my state if a grocery store scanner charges a higher price than what is marked for an item essentially they owe you $10 as a penalty.

    HOW IN THE NAME OF ZEUS ARE OUR GROCERY STORES MORE REGULATED THAN OUR TELECOMMUNICATIONS INDUSTRY?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jul 2018 @ 7:02am

      Re:

      Also, before anyone oversimplifies the problem as "lobbying money" the US Grocery store industry is still over a half-trillion dollar industry. They can ante up to sit at the table if they want.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jul 2018 @ 7:11am

      Re:

      That sector is more competitive as well, and so less likely or able to take coordinated action. When your customers can easily take their custom else where, you work harder to keep them, besides which, poisoning your customers is not good for business

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 13 Jul 2018 @ 7:59am

      Re:

      Perhaps this is true for others but in my state if a grocery store scanner charges a higher price than what is marked for an item essentially they owe you $10 as a penalty.

      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.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 13 Jul 2018 @ 1:45pm

        Re: Re:

        there is an additional statutory $35 "returned check fee" that you owe them

        Is that really statutory? (citation needed. I'm sure they'll charge it; I thought it was a bank-invented fee.)

        reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 14 Jul 2018 @ 5:24am

        Re: Re:

        Not only do they have a returned check fee but many of them have 3rd party to do the check handling. The third party once it finds out it is an insufficient fee check will then go on to sent it back just as fast as they can for a while before notifying you. By the time you find out about it there are multiples of $35 dollar fees.

        Top this with the bank will also hit you with the insufficient fees.

        reply to this | link to this | view in chronology ]

    • identicon
      Norway Jose, 13 Jul 2018 @ 1:03pm

      Re: Business as usual

      On more than one occasion I have been charged a six-pack price for a single soft drink in a Utah Whole Foods store (before ithe store was sold to Amazon).

      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.

      reply to this | link to this | view in chronology ]

    • identicon
      John, 14 Jul 2018 @ 5:45am

      Re:

      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.

      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.

      reply to this | link to this | view in chronology ]

      • identicon
        Neal McLain, 16 Jul 2018 @ 11:26am

        The Cable TV & Broadband Sector Has A Nasty Billing Fraud Proble

        JOHN, 14 JUL 2018 @ 5:45AM WROTE:

        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.

        reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 13 Jul 2018 @ 7:45am

    Ah the marvels of unregulated """competition"""! - Ajit Pai as he wipes his ass with $100 bills fondly supplied by the telcos.

    reply to this | link to this | view in chronology ]

  • icon
    ShadowNinja (profile), 13 Jul 2018 @ 7:48am

    Clearly they need much harsher penalties until it becomes too financially devastating to commit constant fraud.

    reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 13 Jul 2018 @ 5:51pm

      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.

      reply to this | link to this | view in chronology ]

      • icon
        The Wanderer (profile), 14 Jul 2018 @ 4:35am

        Re: Re:

        The reason why doing that would be problematic is that in some cases - particularly with smaller, less market-behemoth companies - by the time the bad behavior is detected, the process is gone through, and the fine is applied, the company may not have enough uncommitted funds to be able to pay a fine of even that base break-even size.

        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.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Jul 2018 @ 8:04am

    While we're on the subject...

    of sneaky fees and charges, don't forget and the banking and automobile sales sectors.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 13 Jul 2018 @ 8:15am

    It shouldn't surprise anyone that commissioned salesmen, especially those who are awarded huge cash bonuses for meeting certain sales goals, will cheat to pad their paycheck. This is not just a modern day problem, it's the same sort of abuse that's been happening for as long as there's been comissioned salesmen. Yet amazingly, companies still act like they never saw it coming.

    reply to this | link to this | view in chronology ]

  • icon
    Bamboo Harvester (profile), 13 Jul 2018 @ 9:38am

    Same old, same old...

    We've seen it before, both with telephone companies and cable providers.

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    carlb, 13 Jul 2018 @ 10:31am

    more of the same

    ...and then they laugh all the way to the nearest Wells Fargo bank?

    reply to this | link to this | view in chronology ]

  • icon
    OA (profile), 13 Jul 2018 @ 12:24pm

    Filed Under:

    Fraud Based Economy

    reply to this | link to this | view in chronology ]

  • identicon
    David, 13 Jul 2018 @ 1:21pm

    A match made, well not in heaven

    Bogus fees and bonuses for services nobody signed up for make for a great union.

    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.

    reply to this | link to this | view in chronology ]

  • icon
    tom (profile), 15 Jul 2018 @ 3:52pm

    So Cox Cable learned by watching Wells Fargo?

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    FreeFlix TV, 10 Sep 2018 @ 11:36pm

    Exactly. This is the reason why many people become cord cutter these days. Now a days, people rely on free live TV apps like Freeflix TV to enjoy live TV for free. As we don't need to pay any subscription fee for these apps, many people preferring them over traditional cable TV.

    reply to this | link to this | view in chronology ]


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