Charter Communications and the company it recently acquired, Time Warner Cable, regularly held on to cash they inappropriately collected from consumer overcharges, according to a report out today from the U.S. Senate’s Permanent Subcommittee on Investigations.
The operators “made no effort to trace equipment overcharges to their origin unless customers specifically asked them to and did not provide notice or refunds to customers,” the report says.
“By contrast,” it adds, “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.”
Charter told the committee that it overbilled customers by at least $442,691 a month. Time Warner Cable kept $639,948 from January to April this year, potentially giving it a $1.9 million boost for all of 2016.
“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,” ranking member Claire McCaskill (D-Mo.) says. “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.”
A separate report from the Democratic minority on the committee says it found, in looking at samples of customers in December, that many with billing problems couldn’t resolve them on the first call. That affected 40% of Comcast customers in the sample, and 20% of Charter customers.
“In addition,” the minority report says, “when customers called about a problem, they had to listen to sales tactics. For example, when Time Warner Cable customers called to ask about price hikes, the company labeled it as an ‘opportunity’ to upsell them, and advised agents, ‘[t]he price adjustment brings with it an opportunity to upsell customers.’ Regardless of the reason that customers may have called, Comcast told its employees to ‘uncover ‘hidden’ needs’ of their subscribers for additional services.”
Committee chairman Rob Portman (R-Ohio) says that the investigation led to improvements: Charter says that it will give a one-year credit to those affected by overcharges.
TWC promised to conduct a monthly audit for overcharges and give affected customers an automatic one-month credit. But it won’t investigate when it began to overcharge customers unless people “bring specific concerns to the company’s attention,” the report says.
“That is a good start but it does not make customers whole,” Portman says.
McCaskill says the companies’ indifference to customer service is due to lack of competition. “In its latest competition report, the FCC estimated that about 61% of U.S. homes only have the choice of one cable company or the satellites if they want to watch television,” she says. “We plan to continue our investigation of competition issues in the pay-TV market, and I look forward to reporting our findings in the coming months.”
Responding to the committee report, Charter says:
Since 2012, we have invested $7 billion in network improvements and added more than 7,000 jobs resulting in growing and longer customer relationships. An audit of our set-top boxes charges over the last nine months found them to be over 99% accurate. To move us closer to 100% accuracy and permanently resolve this issue, we have installed new controls to ensure discrepancies are caught and eliminated on a daily basis. Charter customers who were incorrectly charged for set-top boxes are being notified and given a 12-month credit for these fees.