The FCC (News - Alert) levied “the largest civil penalty assessed from a cable operator by the FCC,” earlier this week, fining cable television and Internet provider Comcast (News - Alert) 2.3 million dollars, after it was revealed that the company charged customers for services they never requested.
The questionable practice that Comcast was utilizing is known as “negative option billing,” or “cramming.” When companies do this, they make it a requirement that customers opt out of optional services that come with an extra charge, instead of opting in. This means that a lack of action by the customer will result in them receiving these extra services, and thus being charged for them. In Comcast’s case, subscribers were opted in to services like “premium channels, set-top boxes, and DVRs,” without any affirmative steps being taken by them to receive these services.
In addition, it seems that in some cases, even opting out of these services was not enough, according to the FCC report. Some customers complained of “being billed despite specifically declining service or equipment upgrades offered by Comcast,” or “having no knowledge of unauthorized charges until they received unordered equipment in the mail,” and “expending significant time and energy to attempt to remove unauthorized charges from their bills and obtain refunds.”
It is clear that Comcast was, at very best, on shaky ethical ground with this practice. “It is basic that a cable bill should include charges only for services and equipment ordered by the customer—nothing more and nothing less,” Enforcement Bureau Chief Travis LeBlanc said in the statement. “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.”
Comcast must pay their fine and also report to the FCC and make sure they are compliant with requirements for affirmative consent from customers to receive services that cost extra. This penalty should serve as a warning to all service providers to make sure they are compliant with business ethics.
Edited by Alicia Young