Comcast to Pay $2.3 Million Fine for Negative Option Billing Complaints

Comcast will pay a $2.3 million fine to resolve an FCC investigation into allegations of negative option billing practices. The fine is the largest civil penalty against a cable company in agency history, the Enforcement Bureau said. Comcast also will put in place a five-year compliance plan that will include procedures designed to get customers' affirmative informed consent before charging them for new services and equipment, said Tuesday's order.

The bureau cited five complaints it received in 2014 and 2015 from Colorado, District of Columbia and Florida residents about getting billed for services they never requested and in many cases never received, such as Showtime, a pay-per-view boxing match and an Xfinity 3450 Latino triple play bundle. "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 bureau Chief Travis LeBlanc in a news release. “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.”

The bureau said the compliance plan will see the company send customers an order confirmation, separate from any bill, that describes the new services and equipment and their charges, offer free blocking of additional new services or equipment to customers' accounts, and implement training to ensure customer service personnel address customers' unauthorized charge complaints. The last negative option billing action the FCC took was in 1995, when Monmouth Cablevision was cited for billing practices for remote controls, though it imposed no monetary penalty, finding the violation de minimis, said the agency.

In a statement Tuesday, the cable ISP said it has "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."

Comcast also said it did "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.”

The fine "provides both relief and validation for Comcast customers everywhere, while sending an important message to the industry as a whole," Public Knowledge said in a statement. Citing a Senate Permanent Subcommittee on Investigations pay-TV investigation and a June PSI report on customer billing practices (see 1606230061), PK said that "it is high time that this type of subscriber extortion is addressed. The FCC’s action with Comcast also highlights more systemic competitive problems in the cable and broadband industries, which provide no market-based incentives to discourage behavior that abuses consumers."