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.
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Ars Technica
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