Antitrust Law Daily Wrap Up, CONSUMER PROTECTION NEWS: Washington sues Comcast alleging ‘deceptive practices’, (Aug 2, 2016)

By Carrie DeLeon,TRDaily

Washington state Attorney General Bob Ferguson filed a lawsuit against Comcast Corp., alleging that the cable and Internet company has engaged in intentional deceptive marketing related to service fees and credit checks, and has purposefully misled customers (State of Washington v. Comcast Corp., August 1, 2016).

The lawsuit seeks more than $100 million in restitution for consumers and penalties. AG Ferguson alleges that "the company’s own documents reveal a pattern of illegally deceiving their customers to pad their bottom line by tens of millions of dollars."

"This case is a classic example of a big corporation systematically deceiving Washington state customers for financial gain," AG Ferguson said during a news conference yesterday. "I won’t allow Comcast to continue to put profits above customers, and the law."

The lawsuit, filed in King County Superior Court, accuses the company of more than 1.8 million violations of Washington’s Consumer Protection Act (CPA), including misrepresenting the scope of its "service protection plan, charging customers improper service call fees, and improper credit screening practices." The lawsuit also accuses Comcast of violating the CPA to all of its nearly 1.2 million Washington subscribers due to the "Comcast Guarantee."

The Attorney General’s office said it brought these issues to Comcast over a year ago, but the company didn’t begin to make changes until recently—"on the verge of this litigation."

In response, Comcast said that it plans to vigorously defend against the lawsuit.

"The Service Protection Plan has given those Washington consumers who chose to purchase it great value by completely covering over 99% of their repair calls," a Comcast spokeswoman said. "We worked with the Attorney General’s office to address every issue they raised, and we made several improvements based on their input. Given that we were committed to continue working collaboratively with the Attorney General’s office, we’re surprised and disappointed that they have instead chosen litigation. We stand behind our products and services and will vigorously defend ourselves."

AG Ferguson, meanwhile, said that Comcast "grossly misrepresented the service protection plan" and overstated the coverage provided by the service protection plan. According to the lawsuit, Comcast charges $4.99 a month for the service plan, and that 500,000 Washington consumers paid more than $73 million in fees for the plan since January 2011.

According to the complaint, Comcast told consumers that the service protection plan covered all inside wires, but didn’t specify that the plan didn’t include wires inside the walls of the home—which constitutes the majority of wiring inside homes.

The lawsuit also alleges that Comcast charged fees to many non-service protection plan subscribers for services that should have been free or otherwise covered by Comcast’s "customer guarantee." Comcast charged thousands of customers for service calls related to the company’s own equipment or network problems, according to the state’s complaint.

"Comcast deceives consumers through the Customer Guarantee it makes to all 1.2 million Washington customers," the AG said. "Comcast’s Customer Guarantee promises: ‘We won’t charge you for a service visit that results from a Comcast equipment or network problem.’ Comcast discloses no limitations on this guarantee. Contrary to this promise, Comcast charged thousands of Washington customers for service calls that resulted from a Comcast equipment or network problem, including issues with Comcast HDMI and component cables, Comcast cable cards, and the installation of drop amplifiers, which fix Comcast signal problems."

In addition, until about June 2015, Comcast provided its technicians with a service call fix code that expressly allowed them "to add service charges to a normally not charged fix code," according to the lawsuit. In other words, AG Ferguson said, the company created a code for technicians to add charges to a service call that should be provided at no cost.

The state’s lawsuit also alleges that the company conducted thousands of improper credit screenings, and improperly required customers who had high credit scores to pay additional deposits that should not have been required.

In addition to more than $73 million in restitution to customers, the attorney general’s office is seeking full restitution for all service calls that applied an improper resolution code, (estimated to be at least $1 million), removal of improper credit checks from the credit reports of more than 6,000 customers; and up to $2,000 per violation of the Consumer Protection Act. Other injunctive relief sought by the state would require Comcast to "clearly disclose the limitations of its Service Protection Plan in advertising and through its representatives, correct improper service codes that should not be chargeable and implement a compliance procedure for improper customer credit checks."

Companies: Comcast Corp.

News: ConsumerProtection WashingtonNews