Phony Fees Net Comcast Billions, Class Says

     SAN FRANCISCO (CN) — A federal class action claims Comcast has bilked cable TV customers out of $1 billion a year since 2014 by charging phony fees for broadcast and sports channels.

Plaintiffs from seven states — California, Washington, New Jersey, Illinois, Colorado, Florida and Ohio — sued the cable giant on Monday, alleging consumer fraud, unfair competition, unjust enrichment and breach of contract.

Lead plaintiff Dan Adkins, of California, says Comcast started using "a shady backdoor way to increase prices" in January 2014. He says the company added a "newly invented" Broadcast TV fee to cable bills without clearly disclosing the price hike to customers or updating its advertisements to reflect the new prices.

"Comcast not only charged the fee to new customers, but also added the charge to the bills of existing customers in violation of their contracts which had promised a flat monthly rate for the term of the contract," Adkins says in the 79-page complaint.

Since 2015, Comcast has raised its Broadcast TV fee by 333 percent, from $1.50 to $6.50 in several markets. The company also started charging a regional sports fee last year, which increased by 350 percent, from $1.00 to $4.50 in multiple markets starting on Oct. 1, according to the lawsuit.

The lengthy complaint features examples of direct mail ads, screen shots from the company's website, service confirmation emails and online chats with sales reps promising customers lower rates than what they allegedly were charged.

In one online chat, a Comcast agent tells a customer the broadcast fee is "intended to offset a portion of the costs of retransmitting broadcast television signals."

The lawsuit cites a July 2015 notice from the Federal Communications Commission, which questions how such fees are calculated, how they are disclosed to customers and "in what way, if at all, are specific fees tied to specific programming changes?"

Adkins says arbitration clauses in customer contracts are unenforceable because deceived customers were not clearly informed of nor did they clearly agree to the arbitration provisions.

All eight named plaintiffs opted out of arbitration clauses in their Comcast service contracts.

Estimating that Comcast has earned more than $1 billion per year — 15 percent of its total revenue — since adding the "bogus fees," Adkins says the company will not stop perpetrating the scheme until it is forced to do so.

"Comcast will continue deceiving and cheating its customers with this broadcast TV fee and regional sports fee scheme until it is forced by law to stop," Adkins says. "The scheme is far too profitable."

Adkins seeks to certify classes in all seven states and to permanently enjoin Comcast from charging the allegedly fraudulent fees, plus restitution and punitive damages.

The plaintiffs are represented by Daniel M. Hattis of Bellevue, Wash., and Jason Skaggs of Skaggs Faucette in Palo Alto, Calif.

Earlier this month, the FCC hit Comcast with a $2.3 million fine for mischarging customers, the largest fine the agency has ever levied against a cable operator.

Comcast is the nation's largest cable-media company and the 35th largest publicly traded company on the planet, with $74.5 billion in annual revenue and $148.2 billion in market capitalization as of May 2016, according to Forbes.

Comcast spokeswoman Jennifer Khoury Newcomb did not immediately return an email request for comment Monday afternoon.

Follow @NicholasIovino

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