WASHINGTON – Representatives from the nation’s top cable and satellite television providers today testified before Congress on customer service issues for the first time, as an extensive investigation led by U.S. Senator Claire McCaskill has examined thousands of internal documents from the companies, pulling back the curtain on the providers’ internal workings.
Representatives for Comcast, Time Warner Cable, Charter, DirectTV, and Dish Network, which together provide programming to more than half of all American households and more than 70 percent of American pay-TV subscribers, testified at today’s Senate hearing. The companies responded to the Senators’ findings, including that the providers charged a host of fees that were not prominently displayed in advertised pricing, required customers wishing to cancel their service to speak to “retention specialists” who were incentivized to not allow cancellations, and—in the case of two companies—overcharged consumers nationwide by millions of dollars without any system for tracking or refunding those charges.
“This morning, for the first time, representatives of our nation’s largest cable and satellite companies are testifying together before the U.S. Congress about their customer service and billing practices. They are here because this Subcommittee has broad jurisdiction to investigate issues which affect the American people. And few other industries touch as many Americans as the companies that provide them with television,” McCaskill said. “We 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 also found that, just as many customers have long believed, some of these fees, like the HD and DVR service fees, aren’t a true reflection of the cost to the company of the service, but rather are based on the revenue goals of the company, and the price a customer is willing to stomach.”
The bipartisan investigation, led by McCaskill and Senator Rob Portman of Ohio—the top-ranking Democrat and Republican Chairman of the Permanent Subcommittee on Investigations—has resulted in findings validating deep frustrations expressed by consumers in polls over recent years. Two reports issued today by the Subcommittee (a report issued by McCaskill on billing and customer service practices, and a joint report by McCaskill and Portman focused on customer refunds) back up those frustrations with data from the providers, finding that:
- On fees, customers were being charged a host of fees that were not prominently displayed in advertised pricing, some of which were for programming that was previously included in a customer’s video package. Some fees charged by providers, like HD and DVR service fees, were not a true reflection of the cost to the company of the service, but rather were based on the revenue goals of the company and the price a customer was willing to stomach.
- On customer service practices, customers calling for help on their accounts faced agents whose job it was not just to solve the customer’s problems, but to sell them additional services—and customers calling to cancel or downgrade service were required to speak to retention agents who were specifically trained and financially incentivized to prevent the customers from canceling and downgrading. Specific quotes from the companies’ training materials included: “One of the most challenging things about being a retention agent is that to be successful, you have to do the opposite of what the customer is calling in for,” “create fear, uncertainty and doubt about switching,” and “avoid reminding the customer of the reason he or she called”. Many of the providers collected data stemming from surveys of their customers which indicated the deep level frustration felt by consumers.
- On refunds, Time Warner Cable and Charter made no effort to trace equipment overcharges to their origin or provide notice or refunds to customers. Charter estimated it overbilled customers by at least $5.3 million annually. During the past six and a half years, Time Warner Cable overbilled its customers nearly $12.5 million. During just the first four months of 2016, Time Warner Cable overbilled customers nationwide more than $600,000, and the Subcommittee projects that, in 2016, Time Warner Cable was on track to overbill customers nationwide nearly $2 million. Time Warner Cable further estimated that, in 2015, it overbilled 4,232 Missouri customers a total of $44,152, and Charter estimated that it has annually overcharged approximately 5,897 Missouri customers a total of $494,000 each year.
Listen to a call between McCaskill and her cable company, and read more, at: mccaskill.senate.gov/pay-TV.
“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,” McCaskill added at the hearing. “And these agents are compensated, in part, based on their ability to sell you more.”
Portman questioned the witnesses on the companies’ practices, and thanked McCaskill for her work on the issue, saying, “She has always been a stalwart friend of consumers.”
Some of the companies investigated have taken preliminary steps in the course of the Subcommittee investigation to improve services. As a response to the Subcommittee’s investigation, Charter and Time Warner Cable agreed to issue a credits for thousands of customers who were overbilled, and Comcast provided additional guidance to its retention representatives about allowing customers to cancel without argument.
McCaskill, the former Chairman of the Senate’s Consumer Protection panel, began soliciting personal stories and tips from Missouri consumers in June 2014 about their experiences with pay-TV providers—and subsequently introduced an amendment aimed at bringing transparency and fairness to cable, satellite, and other pay-TV billing practices.