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


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  1. identicon
    Anonymous Coward, 11 Jun 2019 @ 7:17am

    Comcast netted more than $73 million in errant fees

    and pay a $9.1 million fine

    Yep. Crime pays.

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

  2. icon
    Mason Wheeler (profile), 11 Jun 2019 @ 7:23am

    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.

    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.

    Which is why I say we need a law to cover such scenarios. Allow me to propose The Crime Does Not Pay Act: Should any business be found to have earned money through a violation of the law, they shall be fined a minimum of 100% of the gross revenue earned through their illegal business dealings.

    You want companies like Comcast to stop treating fines for illegal behavior as "the cost of doing business" and profiting anyway? Make it impossible to profit therefrom.

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

  3. icon
    Gary (profile), 11 Jun 2019 @ 7:26am

    Re:

    The Crime Does Not Pay Act

    But this is corporate crime - the lawmakers are paid too much to pass laws that would hurt corporations!

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

  4. identicon
    Anonymous Coward, 11 Jun 2019 @ 7:31am

    Re:

    And like other laws of this nature, its use will be predominately against individuals rather than business.

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

  5. icon
    PaulT (profile), 11 Jun 2019 @ 7:51am

    Re: Re:

    Exactly the problem. You need to make sure the people who write and enforce the laws are on board before you can punish the people who exploit the loopholes, and that likely takes a systemic change that's going to be hard to create.

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

  6. identicon
    Anonymous Coward, 11 Jun 2019 @ 8:38am

    Re:

    It's a 9.1 million fine yes, but you missed the part about also refunding customers their money with 12% interest.

    "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."

    So many the crime won't pay in this case. If people are getting all their money back plus 12% interest plus the added 9.1 million fine. I assume that puts it over the $73 million that they made, which will end up costing them money. So the crime didn't pay.

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

  7. icon
    JoeCool (profile), 11 Jun 2019 @ 8:41am

    Re: Re:

    Actually, it did because they only lost money in Washington. So far, no one else has batted an eye. So they're still running the scam elsewhere.

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

  8. identicon
    Anonymous Coward, 11 Jun 2019 @ 8:45am

    Half a million clients, $5/month, for years
    $9 million fees
    refund plus $18/client
    vs
    $5/month for years

    :thinkingemoji:

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

  9. icon
    PaulT (profile), 11 Jun 2019 @ 8:52am

    Re: Re:

    While you have a point - the corporation has to pay that money back. I would assume that the individuals who personally profited won't have to pay back anything. It still pays for those individuals

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

  10. identicon
    Bruce C., 11 Jun 2019 @ 8:56am

    Re: Re:

    You're assuming that Comcast doesn't make it too hard for the affected consumers to file a claim and that the refund doesn't come in the form of service vouchers.

    If they make the eligibility requirement similar to what TurboTax did for "Free" tax return filing, they'll still turn a profit, even in Washington.

    Fines should at least match the estimated profit, in addition to the refunds.

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

  11. icon
    Toom1275 (profile), 11 Jun 2019 @ 8:58am

    But we can definitely trust Comcast to abide by NN without there being any rules.

    /s

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

  12. identicon
    Anonymous Coward, 11 Jun 2019 @ 9:00am

    Re:

    You want companies like Comcast to stop treating fines for illegal behavior as "the cost of doing business" and profiting anyway? Make it impossible to profit therefrom.

    Your proposal doesn't do that, because the chance of getting caught (and found liable) isn't 100%. It's incongruous with non-corporate rules too; imagine if the only punishment for bank robbery was having to give back 100% of the money.

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

  13. icon
    Anonymous Anonymous Coward (profile), 11 Jun 2019 @ 9:06am

    Some things don't add up

    "Comcast misled more than 500,000 Washington state consumers in this fashion..."

    "...violated the law more than 445,000 times..."

    "...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."

    Somewhere in those, and probably other, numbers lies the answer, but I am having a hard time making these numbers make sense.

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

  14. identicon
    Anonymous Coward, 11 Jun 2019 @ 9:14am

    Re:

    Well they did "pinky swear" right? I mean what could go wrong???

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

  15. icon
    JoeCool (profile), 11 Jun 2019 @ 9:19am

    Re: Re: Re:

    Yeah, they could easily just make the "refund" coupons good for 10% off a year's subscription to HBO or something similar. That's a really common tactic. Microsoft made an art form out of making fake refunds for customers.

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

  16. identicon
    Anonymous Coward, 11 Jun 2019 @ 10:23am

    that amount is about as much harm as spitting into the ocean! i wonder how much the prick got for fining this pathetic figure? no wonder Comcast wont say anything as they made $73m out of the scam!!

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

  17. identicon
    Anonymous Coward, 11 Jun 2019 @ 11:58am

    It only applies to 2016 as well I think. I remember there being something about how its a very limited scope ans thats why the ruling is an embaressmemt.

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

  18. icon
    ECA (profile), 11 Jun 2019 @ 1:00pm

    This is so much fun...

    Anyone here ever call up the phone company and ASK what those Service charges were??
    And in the past 15 years its been shown that about 1/2 of them were phony??
    From a 1800's tax for phones, that expired years ago, and never removed by the gov. to service charges that Never happened..
    https://www.aarp.org/money/scams-fraud/info-05-2012/avoiding-fake-phone-charges.html

    And NOW we have cellphones and Apps...And even Google has been kicking Apps off the site because they TRACK you..or just SPY on you.
    https://betanews.com/2019/01/15/sms-call-log-permissions-purge/

    And dont forget that Calls to 411/information CAN cost you money also..

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

  19. icon
    ECA (profile), 11 Jun 2019 @ 1:01pm

    Re: This is so much fun...

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

  20. identicon
    ryuugami, 11 Jun 2019 @ 4:17pm

    Re: Re:

    Mr. Wheeler didn't say "exactly 100%", he said "a minimum of 100%", so (theoretically) that just sets a floor.

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

  21. identicon
    Anonymous Coward, 11 Jun 2019 @ 6:29pm

    Re: Re:

    The ceo should have his pubic hairs plucked from his testicles assuming ceo has testicles.

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

  22. identicon
    Anonymous Coward, 12 Jun 2019 @ 2:52am

    Re: Re:

    It's a 9.1 million fine yes, but you missed the part about also refunding customers their money with 12% interest.
    I didn't miss it.

    I just don't believe Comcast is going to do so. Even if they do, they'll simply work off the interest collected over the years.

    No matter how you spin this, Comcast made millions illegally and gets away with it.

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

  23. icon
    Mason Wheeler (profile), 12 Jun 2019 @ 7:34am

    Re: Re: Re:

    Yes, that was deliberate.

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


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