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


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  1. 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.

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