WASHINGTON • Cable TV companies often avoid refunding customers on overcharges and employ service representatives whose job is to “upsell” customers who call with a complaint, according to a Senate investigative report.
The investigation, spearheaded by Sens. Rob Portman, R-Ohio, and Claire McCaskill, D-Mo., culminated in a hearing Thursday with representatives of five leading cable or satellite TV companies, including Charter, which serves the St. Louis region.
The senators’ Permanent Subcommittee on Investigations issued a report describing the no-refund allegations. McCaskill released a separate report detailing problems with customer service and complicated bills.
There is “no clear process of how to get the best price from you guys, ” she told the industry executives.
Investigators also found that the companies have lower rates “that are never advertised, ” McCaskill said.
“That is the kind of stuff that is driving people through the wall, ” McCaskill said.
But Sen. Rand Paul, R-Ky., said that car dealers don’t publish their lowest possible price, either, and that as long as there is competition in the cable industry, “let the buyer beware.”
Paul took a swipe at the investigation, saying it was tenuous for Congress, with a low job-approval rating and confronting a $19 trillion debt, to be lecturing an industry that also has a low approval rating but is also providing services that many Americans like.
“We have more important problems” facing the country, Paul said. “Maybe the house is not on fire.”
“I’m not about to apologize” for oversight, McCaskill said. When her constituents complain, as they did about cable service, “I’m on it, ” she said.
If Congress doesn’t engage in oversight because Congress is unpopular, she said, “we might as well put out a sign, ‘gone fishing.’”
Portman said committee investigators found “troubling findings” that Time Warner and Charter made, as the joint report said, “no effort to trace equipment overcharges to their origin unless customers specifically asked them to do so and did not provide notice or refunds to customers.”
Representatives of the five cable and satellite companies — Charter, Time Warner, Comcast, AT&T Entertainment Group, and Dish Network — said they were aware of the customer complaints, and had been working to fix them.
But Portman said he found some of the practices uncovered by subcommittee investigators, including companies that overbill customers, “hard to believe.”
“In my view, that’s a ripoff of Ohio customers, ” he said of 40, 000 Ohio customers the committee investigators found were overcharged by Time Warner.
McCaskill said investigators determined that combined, Time Warner and Charter had overcharged more than 10, 000 Missouri customers, with Charter alone acknowledging it overcharged 5, 897 customers almost $500, 000 annually.
Portman said Comcast, DirecTV, and Dish have done better, and that Charter and Time Warner, as a result of the committee’s investigation, have taken steps to improve billing practices.
McCaskill, who has been pushing the investigation for more than a year, recounted her own frustrations dealing with a cable customer service representative just this week.
“I called my other service provider to ask to remove the $7.99 fee that I’m paying for a protection plan. The agent I spoke with insisted that it would cost me $10 to remove the fee from my bill, ” she said. “I asked repeatedly about why I needed to pay a fee to stop paying a fee. Finally, I threatened to quit and the agent transferred me to a retention agent who told me that, no, I didn’t need to pay a $10 fee because I had had the plan for more than a year. Had I stayed on the phone with the first agent, I would have been stuck paying that fee.”
“I kept getting mad and eventually I got 120 bucks back, ” she said.
McCaskill said subcommittee investigators “found that customers are being charged a host of fees that are not included in advertised pricing, some of which are for programming that used to be included in a customer’s video package.
“We found that the customers who called for help on their accounts face agents whose job it is not just to solve the customer’s problems, but to sell them additional services, ” she said. “At one cable company, even when the customer called in to ask about why their bill was going up, the company told them ‘the price adjustment brings with it an opportunity to upsell customers.’ And these agents are compensated, in part, based on their ability to sell you more.”
Kathleen “Kip” Mayo, executive vice president for customer operations at Charter Communications, told the subcommittee that the company’s “playbook for success” has improved customer service since 2012.
She said the company has hired 7, 000 customer service representatives, dramatically reduced the number of outsourced, foreign customer service representatives and invested $7 billion in the company’s network.
Mayo said customer service calls have declined since 2013.
“Our churn is down, our existing customers are staying longer, ” she said, adding that a recent audit of the company’s billing practices showed that 99.4 percent were accurate.
“No accuracy rate short of 100 percent is acceptable, ” she said. She told McCaskill her company would notify overbilled customers and refund them 12 months of overbilling.
Tom Karinshak, senior vice president for customer service at Comcast, said that his company has reassessed policies and fees, and has simplified its bills.
