Senate Hearing Shows Cable Companies Routinely Overbill Customers, Do Little To Correct Errors

Failures

from the wrist-slaps-and-platitudes dept

If you’ve been distracted by something like a coma, you may have noticed that the cable industry has developed an atrocious reputation for poor customer service, built over a generation of regulatory capture, prioritizing growth over customer service, and just generally not giving much of a damn. By and large, a Congress slathered in telecom and cable campaign contributions has ensured that nothing much changes on that front, with most politicians taking every opportunity to in fact defend this dysfunctional status quo from innovation, competition, or change.

As such, it was marginally adorable to see Congress hold a hearing last week designed to deliver a few light wrist slaps to cable executives for their inability to seriously improve. Senators Rob Portman and Claire McCaskill simultaneously released a study (pdf) exploring how a number of large cable companies routinely overbill consumers, and do little to nothing to actually resolve such errors. In fact, a study released by the Senate found that Charter and its recently acquired subsidiary Time Warner Cable routinely overbill customers to the tune of around $7.2 million per year:

Between January and April 2016, Time Warner Cable overbilled customers nationwide an estimated $639,948. The Subcommittee projects that, in 2016, Time Warner Cable will overbill customers nationwide a total of $1,919,844. Charter has not yet completed the underlying work necessary to determine how much it has overbilled customers. But it has informed the Subcommittee that it overbilled customers by at least $442,691 per month.

What’s more, the study found that these two companies specifically have a habit of doing even less than other upopular cable companies (read: nothing) after customers were overbilled:

During the six and a half year time period covered by the Subcommittee?s investigation, Time Warner Cable and Charter did not automatically refund or credit customers for equipment overcharges they discovered. By contrast, Comcast and DirecTV provided full refunds to overcharged customers, and Dish?s sophisticated billing system is designed to prevent these types of issues from occurring in the first instance.

And as a reminder: Time Warner Cable and Charter just merged, potentially creating a Voltron of errant overbilling. And thanks to binding arbitration mouseprint now buried in every cable and broadband contract under the sun, overbilled customers can’t technically sue.

While both Time Warner Cable and Charter have promised to implement systems to avoid overbilling customers moving forward, such inquiries are usually geared toward scoring some cheap political brownie points among cable-loathing constituents, and rarely result in much of a follow-up (and there could be follow-up, since much of this technically constitutes false advertising). Still, to her credit, McCaskill also touched on the practice of misleading below-the-line fees used by cable operators to covertly jack up the advertised rate of services post-sale:

“We found that customers are being charged a host of fees that are not included in advertised pricing, some of which are for programming that used to be included in a customer?s video package. We also found that, just as many customers have long believed, some of these fees, like the HD and DVR service fees, aren?t a true reflection of the cost to the company of the service, but rather are based on the revenue goals of the company, and the price a customer is willing to stomach.?

Again, that has been a problem for years in both cable and telecom, thanks in part to Senators and regulators that have a nasty habit of pretending it’s not happening. From “broadcast TV fees” that bury the cost of programming below the line, to bizarre, nonsensical charges like “internet cost recovery fees” — most of the “innovation” in telecom and cable these days occurs in the realm of adding misleading charges to your bill, not in improving actual service or support.

A second study presented at the hearing goes into more detail, examining how cable providers also make it difficult if not impossible to comparison price shop (another benefit of below the line fees). McCaskill even offered up a recording of her recent call with DirecTV, made after she realized the company for years had been charging her an $8 per month “protection plan” fee she neither wanted nor asked for.

“I said, ‘well, were you going to tell me this?’ They said, ‘no you have to call in and ask,'” McCaskill said at the hearing (you can find a full video of the hearing here). “If I hadn’t called in and asked, that $10 could still be on my bill today based on the billing practices of the companies represented at this hearing.”

And while cable’s best and brightest spent plenty of time at the hearing claiming they’ve learned the error of their ways and are doing everything under the sun to change, that’s the same promise they’ve given every year for more than fifteen years. Surely this wrist slap will be the wrist slap that sends them running back to the drawing board with a heartfelt desire to change?

Filed Under: cable, claire mccaskill, customer service, fraud, overbilling, tv
Companies: comcast, directv, time warner cable