A proposed class-action lawsuit accuses Comcast of falsely advertising low prices and then using poorly disclosed fees to increase the amount paid by cable TV customers.
Comcast’s “Broadcast TV Fee” has increased from $1.50 a month to $6.50 since 2014, while its “Regional Sports Fee” has gone from $1 to $4.50 since 2015, according to the complaint filed last week in US District Court in Northern California (PDF). These fees are in addition to the advertised rates.
“Comcast’s fraud pervades the entire life cycle of the customer,” the complaint says. “First, Comcast conceals and misrepresents the fees in its advertising and in its communications with prospective customers. Second, Comcast commits billing fraud by subtracting the invented fees from the top-line service price in its bills and instead hiding and disguising the charges elsewhere in the bill. Third, to any customers who question Comcast about the bogus charges, Comcast staff and agents explicitly lie by stating that the Broadcast TV Fee and the Regional Sports Fee are government-related fees or taxes over which Comcast has no control.
Comcast also recently told customers that it would start charging a $2 “Voice Technology Fee” in January 2017, according to DSLReports, but references to the new fee seem to have been removed from Comcast’s website.
Even signing a multi-year contract for a fixed monthly rate does not protect customers from fee increases, the lawsuit says. “By increasing these fees in the middle of the contract term, Comcast has found a way to secretly and repeatedly increase the monthly price it charges for its channel packages despite its promise to charge a flat rate for one or two years,” the complaint said.
The proposed class action has eight plaintiffs in California, Washington, New Jersey, Illinois, Colorado, Florida, and Ohio, all of whom exercised their rights to opt out of Comcast’s arbitration clause. They allege breach of contract, unjust enrichment, and violation of consumer protection laws in their states of residence. The plaintiffs seek a court order certifying the class; an injunction preventing Comcast from continuing with the alleged deception; and monetary damages including “disgorgement of all profits and unjust enrichment that Comcast obtained as a result of its misconduct as alleged.”
Comcast hasn’t filed a response in court yet, but it provided a statement to Ars today, saying, “We have been working to make it easier for customers to understand what they’re paying for, which is why we list the Broadcast TV and Regional Sports fee separately on the bill and include disclaimers about them in our advertising. It’s also worth noting that the complaint itself demonstrates that these fees are disclosed and that they’re not part of promotional pricing.”
The fees are related to the amount Comcast pays broadcasters and programmers to carry TV channels. Comcast’s website says the Broadcast TV Fee “recovers a portion of the costs of retransmitting broadcast television signals,” while the Regional Sports Network Fee “recovers a portion of the costs of distributing regional sports networks to customers receiving our Digital Starter and Xfinity TV 450 Latino tiers of service.”
Comcast has blamed rising TV prices on its payments to programmers, saying in 2014, “Our programming costs have increased by over 130 percent over the past 10 years while our consumer pricing has increased at about half that rate.”
The proposed class action says that advertising materials often “buried [the Broadcast TV fee] in fine print (where it was listed only by name and never defined) in a sentence which included government-related taxes and fees that may be charged.”
The complaint provides screenshots of Comcast’s online ordering system, demonstrating that the displayed monthly totals don’t include the additional fees:
“Comcast’s statement that ‘This is the base monthly total of all recurring charges for the services you have selected’ is a lie,” the complaint says. “Comcast intentionally omits the recurring and invented monthly Broadcast TV Fee and Regional Sports Fee from the ‘Monthly Total’ even though those fees are in fact additional ‘recurring charges for the services you have selected’ (then totaling $4.25/month in Sacramento, California) above and beyond the promised flat rate price of $89.99/month.”
Another screenshot of the final order submission page prominently states the monthly charge as $89.99 a month without saying what the extra fees will cost:
The complaint also includes the text of customer support chat transcripts in which customer representatives describe the fees as “taxes.” A Comcast residential services agreement quoted in the complaint lumps extra costs to consumers in with “governmental or quasi-governmental taxes, fees, or assessments.”
“Comcast is intentionally deceiving its customers, and committing massive billing fraud, by hiding and misrepresenting the bogus Broadcast TV Fee and Regional Sports Fee in its bills in order to avoid being caught raising prices on its customers and breaching its agreements with them,” the complaint said.
In a separate matter, the FCC last week fined Comcast $2.3 million for billing customers for services and equipment they never requested. In February, six Democratic US senators criticized Comcast and other providers for charging erroneous fees, such as cable modem rental fees billed to customers who bought their own modems.