Minnesota AG lawsuit: Comcast misled customers about prices, fees

Minnesota Attorney General Lori Swanson sued the nation's largest cable and internet provider Friday, alleging that Comcast deceptively hiked prices and misled thousands of residents about the actual cost of their TV packages.

The suit alleges that the telecommunications giant quietly raised fees after wooing customers with low rates, tacked unwanted equipment and services onto bills and failed to send Visa gift cards offered in its lucrative promotional deals.

Swanson, whose office began investigating more than two years ago after receiving consumer complaints, said documents and customer service calls show the company is padding Minnesotans' bills with fees "designed to fly under the radar."

"They intentionally make their pricing very, very opaque and intentionally not straightforward," said Swanson, a Democrat. "They are designing a scheme to have a lower base price but then to fee people to death with these fees."

Comcast, which rebranded as Xfinity in 2010, rejected the allegations, saying "the facts today simply do not support the Minnesota attorney general's allegations."

"We fully disclose all charges, fees and promotional requirements — and in fact, have made numerous enhancements in our communications with our customers over the past few years," Comcast spokeswoman Jill Hornbacher said.

Many of the incidents cited in the complaint, which date back to 2014, have been resolved, she said. Comcast would prefer to "work collaboratively" with the office to "resolve any remaining issues" as Swanson's term ends in January, she added.

The complaint outlines practices and communications that state prosecutors say put Comcast afoul of Minnesota's consumer protection laws against deception and fraud. Those actions include quoting a fixed price and then charging another, much higher rate and signing consumers up for new services or products without their permission.

Those hikes often come in the form of added fees that Swanson said can boost a customer's quoted package price by upward of 30 percent. The complaint includes several examples of steep fee increases in recent years. One, which appears on bills as a "Regional Sports Fee," has ballooned by 700 percent, from $1 to $8 a month, since it was first introduced in 2015. The complaint also documents numerous customer service calls that allegedly show Comcast representatives telling Minnesotans their prices would remain flat and, in some cases, falsely blaming federal regulations for those added fees.

Barbara Laporte saw her bill jump from $107 to $143 a month between 2016 and 2018, even though she thought she was signing up for a fixed two-year rate. During one 2016 customer service call released by Swanson's office, a representative repeatedly assures Laporte that she will receive the lower price of $107.38, even "after taxes and equipment."

"I have automatic payment and so I wasn't really watching it very closely," the New Brighton resident said. "It was going up maybe a dollar or two at a time ... until it got much higher, and then I looked back, I printed all the bills." The added sports fee was especially baffling for the retiree. "I don't even watch sports. But we didn't have any choice about that," she said.

The complaint also documents multiple examples of consumers who say they were never mailed prepaid Visa gift cards that were promised as part of promotional deals, some of which were advertised as being worth up to $200.

Jane Kennedy, of North St. Paul, signed up for such a deal in August 2013, planning to use the added cash for Christmas shopping. But the card never arrived in the mail. It was only after Swanson's office intervened, writing a letter to the company, that the promised cash was delivered months later, in April 2014.

"I don't like when people lie to me," Kennedy said of her decision to get involved. "Something's promised to me and I don't get it, I'm going to fight for it."

Minnesota is not the first state to target Comcast's pricing practices through the courts. Washington state sued the company for $100 million in 2016, alleging that it duped consumers into paying more than $72 million in unnecessary service fees. Comcast has said it disagrees with the claims in that suit, which is currently at trial. In November, the company reached a $950,000 settlement with the state of Massachusetts in a separate consumer protection suit that targeted early termination fees. The company has also faced class-action suits.

Comcast serves hundreds of thousands of customers in Minnesota, according to Swanson's office. Given the company's dominance in the market and lack of rate transparency, fed-up customers can struggle to find alternative providers.

Swanson, who leaves office in early January, said she hopes to see incoming Attorney General Keith Ellison make the case a priority. The goal, she said, is to force changes in Comcast's practices and secure restitution for customers who were defrauded or deceived, as well as civil penalties.

"We want people to get their money back," Swanson said.

Torey Van Oot • 612-673-7299