WASHINGTON, DC — Comcast is paying the price for being accused for wrongfully charging consumers for services and equipment they never authorized.
In an announcement Tuesday, the FCC’s Enforcement Bureau confirmed that the MSO will fork over $2.3 million to settle an investigation into the claims by cable TV customers that they were being unknowingly billed for things they did not request.
It is the largest civil penalty ever assessed to a cable TV operator by the FCC.
The Communications Act and the FCC’s rules prohibit a cable provider from charging its subscribers for services or equipment they did not affirmatively request, a practice known as “negative option billing.”
Also prohibited under the Act and the Commission’s rules is a similar practice by telecommunications carriers when unauthorized charges are placed on customers’ phone bills, an abuse known as “cramming.”
“It is basic that a cable bill should include charges only for services and equipment ordered by the customer—nothing more and nothing less,” said Travis LeBlanc, Chief of the FCC’s Enforcement Bureau. “We expect all cable and phone companies to take responsibility for the accuracy of their bills and to ensure their customers have authorized any charges.”
The FCC says it received numerous complaints from consumers alleging that Comcast added charges to their bills for unordered services or products, such as premium channels, set-top boxes, or digital video recorders (DVRs).
In some complaints, subscribers claimed that they were billed despite specifically declining service or equipment upgrades offered by Comcast. In others, customers claimed that they had no knowledge of the unauthorized charges until they received unordered equipment in the mail, obtained notifications of unrequested account changes by email, or conducted a review of their monthly bills.
Consumers described expending significant time and energy to attempt to remove the unauthorized charges from their bills and obtain refunds.
In response to these complaints, the FCC undertook an investigation of the company.
Under the terms of the settlement, Comcast will implement a five-year compliance plan and “adopt processes and procedures designed to obtain affirmative informed consent from customers prior to charging them for any new services or equipment.”
Comcast will also send customers an order confirmation separate from any other bill, “clearly and conspicuously,” describing newly added products and their associated charges.
Further, Comcast will offer to customers, at no cost, the ability to block the addition of new services or equipment to their accounts.
The settlement also requires Comcast to implement a detailed program for redressing disputed charges in a standardized and expedient fashion, and limits adverse action (such as referring an account to collections or suspending service) while a disputed charge is being investigated.