Comcast sued for $100m by AG ‘for duping 4 lakh customers’

image-for-comcast-sued-mediabriefA first-of-its-kind lawsuit has been filed against US cable TV and internet giant Comcast is being sued for $100 million by the Attorney General, seeking refunds for more than 400000 Washingtonians who, it is alleged, were duped by the company through nearly 2 million Consumer Protection Act violations to pad their bottom line by tens of millions of dollars.

Comcast has said in a statement it would defend itself vigorously.

Attorney General Bob Ferguson filed a lawsuit  against Comcast Corporation in King County Superior Court on Monday, alleging the company’s own documents reveal a pattern of illegally deceiving their customers to pad their bottom line by tens of millions of dollars.

The lawsuit accuses the company of more than 1.8 million violations of Washington state’s Consumer Protection Act (CPA), including misrepresenting the scope of its Service Protection Plan, charging customers improper service call fees and improper credit screening practices.

This case is a classic example of a big corporation deceiving its customers for financial gain… I won’t allow Comcast to continue to put profits above customers — and the law: Attorney General Bob Ferguson

The lawsuit also accuses Comcast of violating the CPA to all of its nearly 1.2 million Washington subscribers due to its deceptive “Comcast Guarantee.”

Given that we were committed to continue working collaboratively with the Attorney General’s office, we’re surprised and disappointed that they have instead chosen litigation. We stand behind our products and services and will vigorously defend ourselves: Beth Hester, Comcast VP of external affairs

The lawsuit is the first of its kind in the nation — though the Service Protection Plan is a nationwide program and many of the improper practices are used in all of Comcast’s markets. The Attorney General’s Office brought these issues to Comcast over a year ago, but the company didn’t begin to make changes until recently — on the verge of this litigation.

Comcast said it would defend itself vigorously. ‘Given that we were committed to continue working collaboratively with the Attorney General’s office, we’re surprised and disappointed that they have instead chosen litigation. We stand behind our products and services and will vigorously defend ourselves.’

“This case is a classic example of a big corporation deceiving its customers for financial gain,” Ferguson said. “I won’t allow Comcast to continue to put profits above customers — and the law.”

‘Misleading Service Protection Plan from Comcast’

The AGO lawsuit accuses Comcast of misleading 500,000 Washington consumers and deceiving them into paying at least $73 million in subscription fees over the last five years for a near-worthless “protection plan” without disclosing its significant limitations. Customers who sign up for Comcast’s Service Protection Plan pay a $4.99 monthly fee ostensibly to avoid being charged if a Comcast technician visits their home to fix an issue covered by the plan.

Comcast routinely claimed that the “comprehensive” plan covered the cost of all service calls, including those related to inside wiring, customer-owned equipment connected to Comcast services and on-site education about products. However, Comcast did not appropriately disclose that the plan does not cover repairs to any “wall-fished” wiring — wiring inside a wall — which constitutes the vast majority of wiring inside homes.

As part of the AGO investigation, customers contacted Comcast multiple times. Seventy-five percent of the time, Comcast representatives told these customers the plan covered all inside wiring. That isn’t true.

Customer service scripts, obtained during the investigation, direct Comcast’s representatives to state that the plan covers service calls “related to inside wiring” or “wiring inside your home.” The plan does not, in fact, cover the vast majority of inside wiring.

The AGO investigation uncovered that Comcast misrepresents the limitations of several other elements of the plan, including its coverage of service calls related to consumer-owned equipment and the repair of cable jumpers, connectors and splitters.

While Comcast claims that these restrictions are in the plan’s terms and conditions, Comcast does not provide those terms and conditions to its customers, does not require customers to approve them nor do they tell customers that these additional terms and conditions exist. A customer must proactively search Comcast’s website to find these terms and conditions.

‘Improper service fees charged by Comcast’

The AGO lawsuit also accuses Comcast of charging fees to many non-Service Protection Plan subscribers for services that should have been free.

Comcast deceives consumers through the Customer Guarantee it makes to all 1.2 million Washington customers.  Comcast’s Customer Guarantee promises: “We won’t charge you for a service visit that results from a Comcast equipment or network problem.” Comcast discloses no limitations on this guarantee.

Contrary to this promise, Comcast charged thousands of Washington customers for service calls that resulted from a Comcast equipment or network problem, including issues with Comcast HDMI and component cables, Comcast cable cards, and the installation of drop amplifiers, which fix Comcast signal problems.

In addition, until approximately June 2015, Comcast provided its technicians with a service call fix code that expressly allowed them “to add service charges to a normally not charged fix code.” In other words, the company created a code for technicians to add charges to a service call that should be provided at no cost.

‘Improper credit checks by Comcast’

The AGO investigation uncovered thousands of instances of improper credit screening by Comcast, unnecessarily impacting the credit reports of those customers.

Comcast requires a deposit for equipment, but that deposit can be waived if a credit check reveals a high credit score.

On more than 6,000 occasions, however, Washington state consumers paid a deposit to Comcast, despite credit checks performed by the company revealing the customers had high credit scores. This indicates that the either: (a) customers paid the deposit to avoid a credit check appearing on their credit report, only to have Comcast run one anyway; or (b) customers were forced to pay the deposit despite their high credit score, contrary to Comcast’s policy.

What the Attorney General’s Office is seeking for the  CPA violations:

  • More than $73 million in restitution to pay back Service Protection Plan subscriber payments;
  • Full restitution for all service calls that applied an improper resolution code, estimated to be at least $1 million;
  • Removing improper credit checks from the credit reports of more than 6,000 customers;
  • Up to $2,000 per violation of the Consumer Protection Act; and
  • Broad injunctive relief, including requiring Comcast to clearly disclose the limitations of its Service Protection Plan in advertising and through its representatives, correct improper service codes that should not be chargeable and implement a compliance procedure for improper customer credit checks.

Comcast has stopped selling new service protection plans to customers Washington. However, customers already subscribed still have the service.

 “This case is a classic example of a big corporation systemically deceiving Washington state consumers and putting profits above those customers and the law,” Ferguson had said at the media briefing on Monday.

The Attorney General’s office reportedly first became aware of the practices after an employee in the office, a Comcast customer, raised a red flag internally relating to the credit-check issue. The AG’s then got into an investigation of Comcast’s practices over a year ago.

Comcast declined comment on specifics of both, the lawsuit and the various allegations. Comcast did say it was unaware of the extent of the lawsuit before WA State issued its press release.

Beth Hester, Comcast VP of external affairs in Washington state said in a company statement: “The Service Protection Plan has given those Washington consumers who chose to purchase it great value by completely covering over 99 percent of their repair calls. We worked with the Attorney General’s office to address every issue they raised, and we made several improvements based on their input.”

The company said it would defend itself vigorously. “Given that we were committed to continue working collaboratively with the Attorney General’s office, we’re surprised and disappointed that they have instead chosen litigation. We stand behind our products and services and will vigorously defend ourselves.”

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