Washington's state attorney general launched a $100 million lawsuit against Comcast on Monday, alleging that the cable giant violated the state's Consumer Protection Act by using deceptive sales practices.
The office of Washington State Attorney General Bob Ferguson charged that Comcast (cmcsa) mischaracterized the scope of its Service Protection Plan, improperly charged customers for service calls, and engaged in "improper credit screening practices," according to a statement.
The office of the attorney general (AGO) underscored this as the first suit of its kind in the U.S., but hinted there might be more to come as Comcast's Service Protection Plan is offered nationwide and that many of the improper practices are used in all of Comcast markets.
Comcast is the nation's largest provider of broadband and Internet services.
In addition, the lawsuit filed in King County Superior Court charged that Comcast misled a half a million consumers in the state, essentially tricking them into paying $73 million in aggregate subscription fees over five years for what the office described as a "near worthless protection plan."
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The sales pitch for the $4.99-a-month plan is that it will eliminate service fees for in-home visits by Comcast technicians. But Comcast was said to have neglected to note that it does not cover any in-the-wall wiring.
From the AGO's statement:
Comcast routinely claimed that the “comprehensive” plan covered the cost of all service calls, including those related to inside wiring, customer-owned equipment connected to Comcast services and on-site education about products. However, Comcast did not appropriately disclose that the plan does not cover repairs to any “wall-fished” wiring—wiring inside a wall—which constitutes the vast majority of wiring inside homes.
Citing its own investigation, the AGO found that 75% of the customers who contacted Comcast multiple times were told by company representatives that the plan covered all inside wiring. But that was not the case.
On the credit check front, the AGO's office said it uncovered thousands of cases of improper credit screening. While Comcast requires a deposit for cable gear, that can be waived if the customer has a high credit score. And yet, the AG noted, in at least 6,000 cases, consumers were charged a deposit when their credit checks should have nullified that requirement..
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Update: In an emailed statement, a Comcast spokeswoman said that the company's Service Protection Plan gave Washington consumers who purchased it "great value by completely covering over 99% of their repair calls."
She added that the company had worked with the state's Attorney General’s office to address every issue raised, and made several improvements based on that office's input. "Given that Comcast was committed to keep working with the AG's office "we're surprised and disappointed" that the AG instead chose litigation.'
The company will vigorously defend itself, she said.