The Federal Communications Commission just smacked Comcast with a $2.3 million fine — the ‘largest civil penalty’ ever issued to a cable operator.
The fine centers around a practice known as ‘negative option billing.’ When signing up for a new cable subscription, for example, a new customer might get three months of premium channels — like HBO or Showtime. If the customer forgets to cancel within the period, they’re on the hook for the amount of each channel, even if it wasn’t properly communicated that the channels were included in the first place.
Many complained of negative option billing for DVR rentals as well, which some thought were included with their cable package.
Comcast’s problem seems to revolve around a lack of communication at the point of sale, as well as general confusion surrounding ever-more-confusing cable packages and bundles. For its part, Comcast disagrees with the FCC’s actions, stating “in the past, our customer service should have been better and our bills clearer, and that customers have at times been unnecessarily frustrated or confused.”
The company issued the following statement to The Verge:
We do not agree with the Bureau’s legal theory here, and in our view, after two years, it is telling that it found no problematic policy or intentional wrongdoing, but just isolated errors or customer confusion. We agree those issues should be fixed and are pleased to put this behind us and proceed with these customer service-enhancing changes.”
Although the bulk of the problems stemmed from confusing billing practices, customers that were aware of the bundled add-ons also reported issues when trying to cancel, or return items within the trial. The FCC cited numerous instances from mid-2014 through 2015 that customers were billed for services they didn’t agree to, or for those that they thought had been cancelled.
Moving forward, Comcast has to be more transparent with its product sales and billing practices, in addition to paying the fine.
Update: Comcast had this to add.
We have been working very hard on improving the experience of our customers in all respects and are laser-focused on this. We acknowledge that, in the past, our customer service should have been better and our bills clearer, and that customers have at times been unnecessarily frustrated or confused. That’s why we had already put in place many improvements to do better for our customers even before the FCC’s Enforcement Bureau started this investigation almost two years ago. The changes the Bureau asked us to make were in most cases changes we had already committed to make, and many were already well underway or in our work plan to implement in the near future.