The FCC fined Comcast $2.3 million for placing unauthorized items on users’ bills. The settlement, which Comcast agreed to, will also help guard against this happening again in the next few years, but it falls short of fixing the problem permanently.
Comcast was engaging in a practice the FCC refers to as “Negative Option Billing.” Essentially, the idea is to place charges on a user’s bill, and then see if the customer makes contact in an attempt to resolve the issue. Comcast then provided the service or piece of equipment it charged for. If the customer contacted Comcast, then they could return the unwanted equipment. The company would issue a refund for any undesired services. If the customer didn’t contact Comcast to resolve the issue, however, then they were stuck with the additional charges.
Although the FCC did not say how many incidents were reported, it is likely that Comcast succeeded in charging users for unwanted service and equipment without the user noticing or requesting a refund. The FCC said that users were often uninformed of the additional charges until they reviewed their monthly bill or the unexpected equipment arrived in the mail.
After customers realized that Comcast had charged them for unwanted services, they still needed to go through the arduous task of contacting Comcast to attain a refund. The FCC said that the users who reported the issue spent significant amounts of time and energy trying to resolve it.
Sometimes Comcast charged users for a service after they explicitly declined it.
“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 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.”
For Comcast, a $2.3 million fine may pale in comparison to how much the company made from the illegal business practice. In the settlement, Comcast also agreed to adopt a new set of procedures to help avoid this type of issue from reoccurring. Part of these new procedures requires Comcast to send users order confirmation notices separately from the typical billing statement. Comcast is also required to give customers a new account option, which will block the company from adding any new services or equipment to their accounts.
The problem with the settlement, however, is that Comcast only has to follow these new procedures for the next five years. Clearly, the illegality of the practice didn’t stop Comcast before, and it’s unlikely to prevent it from doing the same thing in the future. This is especially true if the amount Comcast made from this illegal practice is greater than the $2.3 million fine.
In the grand scheme of things, it seems the FCC really should have pressed for harsher terms in the settlement, but at least the agreement should help protect customers in the near future.