The lies Comcast allegedly told customers to hide full cost of service
By Jon Brodkin
8 - 10 minutes
A new lawsuit filed against Comcast details an extensive list of lies the cable company allegedly told customers in order to hide the full cost of service.
Minnesota Attorney General Lori Swanson sued Comcast in Hennepin County District Court on December 21, seeking refunds for all customers who were harmed by Comcast's alleged violations of the state's Prevention of Consumer Fraud Act and Uniform Deceptive Trade Practices Act.
The complaint alleges, among other things, that Comcast reps falsely told customers that the company's "Regional Sports Network (RSN)" and "Broadcast TV" fees were mandated by the government and not controlled by Comcast itself. These two fees, which are not included in Comcast's advertised rates, have gone up steadily and now total $18.25 a month.
Comcast has responded to some lawsuits—including this one—by saying that the company had already stopped the practices that triggered the court actions. But Minnesota says that Comcast's lies about the sports and broadcast fees continued into 2017, which is after Comcast knew about identical allegations raised in a separate class action complaint filed in 2016. (That case was settled out of court.)
Here's what the Minnesota AG's complaint says about how Comcast described the controversial fees to customers:
Despite creating the Broadcast TV fee and Regional Sports fee on its own initiative and increasing them at its own whims, Comcast/Xfinity has sometimes misrepresented to Minnesota consumers that it cannot control whether it charged consumers these fees or how much it charged for the fees. For example, Comcast/Xfinity told Minnesota consumers in 2015, 2016, and 2017—when the consumers called the company regarding undisclosed increases on their supposedly fixed-price bills—that the Broadcast TV fee and Regional Sports fee had increased or been added to their bills, but that "those fees are actually local fees and correspond to the FCC and we don't manage those okay? Those aren't up to Comcast;" "but that's something again that's out of our control;" that the increases "are outside our control;" "we have no control over the fees;" "the only thing Comcast cannot control are the taxes and fees within your state;" and that the Regional Sports fee can't be taken off because it's part of the "taxes."
But in fact, "Comcast/Xfinity is not required by any state or federal law to collect such fees," the Minnesota complaint said. Comcast "has chosen to segregate these fees from its base price so it can deceptively advertise and promise an artificially low price to price-sensitive customers, and at the same time confuse and conceal the true monthly cost of its Cable Television Packages."
The AG's office also says that Comcast charged many customers for services they didn't request, and it promised prepaid Visa gift cards as incentives but "did not deliver these gift cards to thousands of Minnesota customers."
"Comcast/Xfinity's conduct has violated Minnesota's consumer protection laws and injured thousands of Minnesota consumers who purchased Comcast/Xfinity's cable television packages," the complaint said.
Comcast blames customer service reps
When contacted by Ars, a Comcast spokesperson yesterday said that "our policy is to be very clear to our customers about the broadcast TV and RSN fees and [tell them] that these are not government-mandated fees."
But employees make mistakes, the Comcast spokesperson said. "Employees may go off script and incorrectly characterize things, but that is not in line with our policy because [the broadcast TV and sports charges] are not government-mandated fees," Comcast said.
Comcast pointed out that the fees are described correctly at this Comcast webpage. On customer bills, the charges are disclosed and listed separately from actual government-imposed taxes, Comcast said.
Comcast hasn't explained why so many of its employees apparently made the same exact mistake, however.
Comcast noted that other cable companies started charging the broadcast TV and sports fees before Comcast began doing so in 2014 and 2015 and that "they reflect the increasing amount we need to pay for broadcast and sports."
"Breaking the fees out makes it easier for customers to see what they're paying for and lets us be clear about the factors that drive price changes," Comcast said.
But as the Minnesota lawsuit notes, breaking the fees out separately also helps Comcast advertise lower rates than it actually charges. Minnesota says that the fee disclosures on Comcast's promotional materials "are inconspicuous and not sufficient to correct the overall misimpression that the emphasized, artificially low base price is the actual price consumers will pay."
Comcast will fight the Minnesota lawsuit and provided this statement:
We're fully committed to our customers in Minnesota, and it's important to us to make sure we deliver best-in-class products and services and that our customers understand the products and services they order. We fully disclose all charges, fees, and promotional requirements—and in fact have made numerous enhancements in our communications with our customers over the past few years. The facts today simply do not support the Minnesota AG's allegations, most of which date back several years and have already been corrected. Our preference all along has been to work collaboratively with the Minnesota AG's Office to resolve any remaining issues the office might have.
Swanson is leaving office after 12 years, and she will be replaced this month as Minnesota attorney general by Keith Ellison. Comcast claimed that "Bringing a lawsuit on the eve of the end of the AG's term is simply not in the best interests of Minnesota consumers.” However, it's not unusual for a new attorney general to continue pursuing lawsuits filed by the previous AG.
AG: Comcast knew of its bad behavior
Extra fees charged by Comcast "include monthly equipment rental fees for equipment to receive its Cable Television Packages, like cable set-top boxes, digital adapters, and Internet modems, as well as one-time activation and installation fees," the Minnesota complaint said. The various fees, "often unbeknownst to consumers, can add 30 percent or more to the Cable Television Package's total monthly price."
Despite blaming customer service reps for the problems, Comcast has known for years "that it has misrepresented the total cost of its Cable Television Packages and failed to disclose that it will charge substantial, additional fees in addition to the deceptively low price that is promised consumers," the lawsuit said. Comcast's internal reports and investigations confirmed these failures, the complaint said.
For example, Comcast "is well aware of its fraudulent practice of charging Minnesota consumers for unauthorized services and equipment that they never requested and/or specifically refused," the lawsuit said, noting that in 2016 Comcast settled an FCC investigation over the practice.
In November 2018, Comcast agreed to pay $700,000 in refunds "and cancel debts for more than 20,000 Massachusetts customers" to settle allegations that it used deceptive advertising to promote long-term cable contracts, Massachusetts Attorney General Maura Healey announced at the time. Comcast is also facing a lawsuit from Washington state that accuses the company of misleading 500,000 customers in order to sell them "near-worthless" service protection plans.
The Minnesota AG's complaint alleges that Comcast reps routinely lied to customers about the actual prices they'd pay during door-to-door solicitations and phone calls. Reps were incentivized by Comcast's commission structure, the complaint said.
Comcast reps used routine customer interactions including repair calls "as a chance to sell or upgrade such packages" because of the commission structure, the complaint said. Here's an example described in the complaint:
When a consumer returned his modem to a Comcast/Xfinity store in 2015, unbeknownst to him, the company changed his Internet service to Blast Internet and charged him $5 for it. When he called Comcast/Xfinity to remove this unauthorized charge, it told him that agents at its stores "really like to do that" because they are paid commission from such practices.
The complaint details many more real-world experiences of individual customers. Here are a few examples of customers who were allegedly promised one price over the phone before being charged a different price:
Comcast/Xfinity misrepresented in 2016 that a consumer would pay $122 per month "including the taxes and fees and equipment" for two years for a Cable Television Package. The consumer confirmed that this was the total price Comcast/Xfinity would charge, stating he did not want to be "surprised" by the company's bills, and Comcast/Xfinity again falsely confirmed it would only charge him $122 per month. Comcast/Xfinity actually charged him approximately $132 per month for the first six months and then raised his bill to $139.90.
In 2014, Comcast/Xfinity falsely promised a price of "only $99" per month to a consumer—who confirmed "and that's all for $99?" to which Comcast/Xfinity replied "that's totally correct." In reality, however, the company charged the consumer $131.46 in the first month and $120.01 in the second month—due to undisclosed DVR and equipment fees.
Comcast/Xfinity deceptively promised another consumer in 2016 that she would pay $107.38 per month, "after taxes and equipment" for two years but actually enrolled her in a $119.99 per month base rate plan, on top of which Comcast/Xfinity charged numerous additional fees.
Similar shenanigans allegedly happened in door-to-door sales.
"Until at least 2017, when making door-to-door sales, Comcast/Xfinity routinely failed to disclose that it would charge numerous additional fees on top of the company's promised price—including, for example, the Broadcast TV fee and Regional Sports fee—or that Comcast/Xfinity could increase these fees at any time and in its discretion," the lawsuit said.
Here are some more customer examples from the lawsuit, focusing on door-to-door sales:
In 2016, Comcast/Xfinity promised a consumer on his Service Order that it would charge him $109, plus tax, for two years. Despite his Service Order stating: "HD/DVR $0" and "Addl. Monthly Fees $ ---" Comcast/Xfinity increased his bill by $19.95 per month by adding an equipment (DVR) fee as well as Broadcast TV, Regional Sports, and HD Technology fees.
Similarly, in August 2016, Comcast/Xfinity promised a consumer that it would charge him the same price for two years and wrote that he would pay $139.99 per month on his Service Order. Comcast/Xfinity instead charged him more, including an undisclosed Broadcast TV fee of $4.50 per month and Regional Sports fee of $3.00 per month, and then raised his rate by over $19.95 per month in the second year of his term by adding an HD Technology fee and an equipment (DVR) fee, despite his Service Order misrepresenting: "HD DVR Qty 1 $Free."
In October 2015, Comcast/Xfinity promised two consumers during its in-home sales pitch a Cable Television Package that would be "locked" for two years. During their two-year term, however, Comcast/Xfinity increased their bill by over $20 per month by adding an undisclosed equipment (DVR) fee and HD Technology fee. When the consumers complained to the company about the price increase, it told them that part of the increase was due to its Broadcast TV fee and Regional Sports fee increases, falsely claiming "those are outside our control."
Likewise, in 2016 Comcast/Xfinity came to another consumer's door and promised that he would pay only $99 per month total for its Cable Television Package. Because he was retired and the total monthly price he would pay was important to him, the consumer asked the company to confirm that his "bottom line" price would be $99 per month, which Comcast/Xfinity confirmed. Comcast/Xfinity further falsely promised on his Service Order that he would not be charged for a DVR, stating: "DVR Qty 1 $0." Subsequently, however, Comcast/Xfinity charged the consumer far more than it promised, including undisclosed equipment (DVR), Broadcast TV and Regional Sports fees.
Even the email confirmations sent to customers after sales were misleading, the lawsuit said.
"Comcast/Xfinity's 'confirmation' emails... did not disclose that it may increase its prices even for consumers on a promotional or minimum-term agreement by increasing the fees it imposes," the complaint said. "Nor did the emails always provide the essential details of the minimum-term agreement, like the duration of the term, that an early termination fee will be charged if the consumer cancels services, or the cost of the early termination fee."
Charges for services customers didn't want
The complaint also lists numerous instances of customers being charged for services they didn't request. Here are a few examples:
In 2015, Comcast/Xfinity deceptively enrolled a consumer in a minimum-term agreement Cable Television Package that she did not want, and then charged her an early termination fee when she cancelled the unrequested package.
In 2015, a consumer called Comcast/Xfinity to have her Internet service restored and was told a technician would be sent out to resolve the issue. Without informing the consumer, Comcast/Xfinity then added a charge for a service protection plan to her account and began charging her $4.99 each month for this unauthorized service.
Comcast/Xfinity fraudulently added and began charging a consumer (who was receiving Comcast/Xfinity's cable and Internet services) for telephone service in 2014, even though the consumer had explicitly declined Comcast/Xfinity's offer for such telephone service. Once Comcast/Xfinity finally agreed to remove this unauthorized service, it still charged the consumer a $130 early termination fee and one month of telephone service.
In 2016, a consumer called Comcast/Xfinity to inquire about its Cable Television Packages but ultimately stated she needed more time to think over her options and did not agree to enroll in any Comcast/Xfinity service. Nevertheless, Comcast/Xfinity enrolled her in a Cable Television Package and shipped her equipment (that she never ordered) in the mail and began sending her monthly bills, as well as threatened to refer her account to a collections agency due to nonpayment.
Comcast/Xfinity fraudulently began charging a consumer a monthly fee for a modem in 2016. The consumer never authorized this charge and had explicitly informed Comcast/Xfinity that he did not want or need a modem from the company because he already had his own.
In 2015, a consumer noticed that Comcast/Xfinity had been charging him $4.99 a month for its service protection plan, even though the consumer had never requested the plan and never consented to this monthly charge.