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US state sues Comcast for $100m in row over 'worthless' repair plans
Tuesday, 02 August 2016 09:09

Washington state is suing Comcast and demanding $100m in damages for allegedly misleading customers.

At a press conference on Monday, Washington Attorney General Bob Ferguson claimed the US cable giant's Service Protection Plan (SPP) had cheated at least 500,000 people out of their money.

People who take out the optional $4.99-per-month plan are told they can, at no extra cost, make unlimited service and troubleshooting calls, and get hassle-free replacement and repairs of cable wiring and equipment in their homes. Basically, you cough up 60 bucks a year to avoid getting lots of charges for support and repairs.

However, Ferguson argued this protection plan is deceptive and riddled with boiler plate clauses and weasel words that make it almost worthless and that it breaks the state's Consumer Protection Act.

In addition, the lawsuit [PDF] claims that Comcast engineers charged SPP subscribers extra fees anyway. It's also alleged that people who paid a deposit not to have a credit check from the company had their credit scores dinged when Comcast checked anyway, or were charged the deposit when the telco already knew their credit was good.

"This case is a classic example of a big corporation deceiving its customers for financial gain," Ferguson said. "I won't allow Comcast to continue to put profits above customers – and the law."

In his lawsuit, Ferguson said Comcast claims its plan covers all callouts by service technicians, but it neglects to mention that customers will still be charged if stuff needs repairing, and that only the visit itself is free under the plan.

The SPP also claims to give "worry-free maintenance of all inside wiring for your cable TV, high-speed Internet and phone service," according to its adverts. Buried in the terms and conditions is a clause that excludes in-wall wiring from this free service, meaning homeowners have to sort this out for themselves.

"In short, due to limitations in the Terms and Conditions, the SPP often ends up failing to cover any repairs at all," the court filing states.

Money, money, money

Since January 2011, Washington state citizens have paid Comcast $73m for SPPs, according to the attorney general. In January 2013 and July 2015, Comcast reaped $41.6m in SPPs but subscription holders only saved around $5m in repair and services costs, leaving a profit of $36.1m for the telco, it is claimed.

The lawsuit also says that Comcast engineers bill customers for service calls that would normally be free. It claims, for example, that an engineer could add a fee for "customer education" during the service call covered under the SPP.

Until July last year, Comcast also incentivized engineers to install drop amplifiers in Comcast customers' homes to boost the signal strength – and bill them for it. Often, poor internet speeds are down to degradation of signals in the wires leading to the house – equipment that it's Comcast's responsibility to service – and the company gave extra credit to staff who installed the amplifiers rather than repair or improve its own gear.

The Washington suit also claims outright fraud from Comcast over its credit screening policy. Customers must either pay a $50 to $150 deposit prior to receiving services, or undergo a credit screening to determine if a deposit is necessary. Credit checks can result in "hard hits" on a person's credit profile, which knocks points off their credit score when future credit inquiries are performed. Thus, Comcast will skip the check if they pay the fee.

However, Washington claims that from January 2013 through January 2016, Comcast took deposits from more than 6,000 Comcast customers with credit scores that were sufficient to avoid Comcast's deposit requirement. They had either paid a deposit to avoid having Comcast run a credit check and had the check run on them anyway, or they were improperly required to pay a deposit despite having a sufficient credit score to avoid the deposit requirement.

Ferguson said the state is seeking $73m in restitution for SPP subscriptions, another million in service charge refunds, removal of the improper credit checks, and up to $2,000 per violation of the Consumer Protection Act. At about $100m, this accounts for 18.5 days of last year's profits for Comcast.

"The Service Protection Plan has given those Washington consumers who chose to purchase it great value by completely covering over 99 per cent of their repair calls," Comcast spokesperson Beth Hester told The Reg.

"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." ®

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Source: http://bit.ly/2arclso