Comcast has agreed to pay $700,000 in refunds "and cancel debts for more than 20,000 Massachusetts customers" to settle allegations that it used deceptive advertising to promote long-term cable contracts, Massachusetts Attorney General Maura Healey announced yesterday. "Comcast stuck too many Massachusetts customers with lengthy, expensive contracts that left many in debt and others with damaged credit," Healey said.
The Massachusetts AG alleged that Comcast violated state consumer protection laws by "fail[ing] to adequately disclose the actual monthly price and terms of its long-term contracts for cable services, including failing to disclose to customers that the company could increase the price of certain monthly fees at any point during the long-term contracts."
Comcast advertised a $99 lock-in rate "but did not adequately disclose equipment costs and mandatory monthly fees" that would add to monthly bills, and "failed to adequately disclose that the fees could increase while the customer was locked into the long-term contract," the AG investigation found.
As a result, customers entered long-term contracts that they could not afford; the inadequately disclosed fees typically raised customers' bills by 40 percent over the advertised price, the AG said.
"These customers were required to pay early termination fees of up to $240 to cancel long-term contracts, even when they downgraded Comcast services to a more affordable monthly package," the announcement said.
Comcast settled the case despite saying that it disagreed with the allegations. Comcast said in a statement to Ars:
Today's settlement with the Massachusetts Attorney General's Office reflects our ongoing effort to improve the customer experience. While we disagree with the allegations in the [settlement]—which relate to years-old advertisements and do not reflect Comcast's current policies and practices—we are committed to partnering with Attorney General Healey and others who share our commitment to improving the experience of our customers in all respects.
Comcast must improve disclosures
Comcast agreed to provide refunds to all Massachusetts customers "who paid early termination fees after downgrading their service or being involuntarily disconnected by Comcast between January 2015 and March 2016," the AG's announcement said. Comcast will also forgive outstanding debts for unpaid early termination fees and related late fees.
Finally, the settlement requires Comcast to improve the disclosures it makes to customers before they sign long-term contracts. "Comcast must disclose the existence of additional fees in all advertisements, and train sales representatives to disclose true monthly service prices to customers before they enter long-term contracts," the AG's office said.
Companies are required to give customers "clear information about the products and services they buy," Healey said. "This settlement should encourage the entire cable and telecommunications industry to take a close look at their advertisements and make sure customers are getting a fair offer."