Here's a shocker: Two of the biggest cable companies in the United States have been overcharging customers by millions of dollars a year. A bipartisan Senate report released Wednesday spills the beans on Charter and Time Warner Cable, industry giants that just combined in a deal worth $79 billion.
During the first four months of 2016, Time Warner overcharged customers by $640,000, according to the report. By the end of the year, those bogus charges are expected to soar to an estimated $1.9 million. But those bloated bills pale in comparison to Charter's overcharges. The company over-bills customers by an estimated $442,691 per month, or nearly $4.5 million a year.
Comcast is generally regarded as one of the least customer-friendly companies in the country, but its billing practices are apparently much better than those of Time Warner and Charter. Neither company automatically issues refunds or credits when they discover overcharges, according to the report. In contrast, Comcast and DirecTV issue full refunds, "and Dish's sophisticated billing system is designed to prevent these types of issues from occurring in the first instance."
Senators spotlight systematic cable overcharging in Ohio, Missouri
The senators who lead the subcommittee that issued the report - Rob Portman, (R-Ohio) and Claire McCaskill, (D-Mo.) - focused on their home states, so specifics on the number of customers overcharged is limited to Ohio and Missouri. In some cases, the overcharges were only about $10 a customer, but in others they were quite a bit more.
Charter estimates it annually overcharged approximately 5,897 Missouri customers a total of $494,000 each year. On average, that works out to roughly $84 per customer, but it's likely that some customers were charged far more than the numerical average.
How do these overcharges occur? "Predictably, customer billing records do not always match customer equipment and service records, meaning that some customers are billed for items they have not ordered while others erroneously escape being charged for services or equipment they use," according to the report.
Although the Senate subcommittee just released its findings, it has been grilling cable executives and digging into financials for quite a while. And the investigation already resulted in changes, the report says. The newly beefed up Charter, which absorbed Time Warner Cable, says it will conduct regular audits of billing practices and grant refunds to customers who were overcharged. And the company says it established controls to make billing more accurate.
Cable companies, ISPs known for poor customer service
This billing snafu is just one more reason why consumers don't trust many cable companies, ISPs, and wireless carriers. Earlier this month, I wrote about a survey of more than 12,000 U.S. consumers that found pay TV providers have "nowhere to go but up" when it comes to customer satisfaction. Cable and satellite TV providers ranked second to last among the 43 sectors surveyed, and only ISPs received a lower score. Of the pay TV providers, Time Warner Cable ranked 12th of 13 companies listed, and Charter was number 10.
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