from the backfired dept
We’ve long covered how cable and broadband companies use a rotating array of bullshit fees to covertly jack up advertised rates, hitting you with a much higher bill after you’ve subscribed. We’ve also noted how new streamlined technologies have been turning the binding arbitration process on its head, making it easier and more affordable for consumers to bury companies with arbitration complaints.
Now those two concepts have unsurprisingly fused. Customers of cable giant Cox Communications are flooding Cox with arbitration complaints over two major fees the company routinely charges users: its “Broadcast Surcharge” and “Regional Sports Surcharge”:
The Hattis & Lukacs law firm last night “filed 295 individual consumer arbitrations against Cox with the American Arbitration Association,” representing clients in 17 of the 19 states Cox operates in, attorney Daniel Hattis told Ars. Hattis said he aims to file thousands more arbitration cases against Cox, which has an estimated 3.4 million TV customers.
Both fees, as we’ve noted previously, are bullshit. The Regional Sports surcharge is simply some of the money your cable company pays to air local sports broadcasts (despite, in many instances, being the local sports broadcaster) even if you don’t watch sports. The “broadcast surcharge,” used by many cable companies, is also just a portion of the money they pay for content buried below the line (more here).
In both instances, these are just the costs of doing business, and should be included above the line as part of your general bill. Cable companies bury them below the line to (again) falsely advertise a lower rate. But it also allows them to covertly raise prices while falsely claiming that their base prices have remained the same.
When the Supreme Court in 2011 ruled in favor of AT&T, it opened the flood gates to companies effectively banning your legal rights using contract fine print. So instead of suing companies or participating in class actions, you were forced to participate in binding arbitration, a lopsided process that’s costly for the end user, and frequently tilts in favor of corporations (the entire reason they love it).
But in more recent years, technological innovation has made it easier and more cost efficient for angry consumers (and lawyers) to file binding arbitration complaints en masse, completely deflating the reason corporations wanted this model to begin with. It’s gotten so bad, some companies (like Amazon) have found it once again makes better sense to bring such complaints back to the courtroom.
While the class action process has no shortage of problems (like consumers seeing very little in compensation while their lawyers buy a new boat), binding arbitration was shopped around by U.S. corporations as a significant improvement over that process. Instead it was a lopsided dumpster fire that made things even worse for consumers much of the time.
That eroding consumer legal rights in fine print is now backfiring spectacular is immensely entertaining. In Cox’s case, it now has to pay $3,300 per arbitration, or nearly $975,000 for the 295 arbitration complaints filed so far. Like most cable companies (Comcast, Charter also utilize the same fees), Cox obviously isn’t happy it may face something vaguely resembling accountability for false advertising.