Weiser announces agreement with CenturyLink to end deceptive practices
CenturyLink will pay over $8.4 million for deceptive practices and false advertising, Attorney General Phil Weiser announced on Thursday.
“We received hundreds of complaints from consumers that their bills were more than the advertised price or the price that sales agents quoted them,” Weiser said. “This sticker shock often was a result of misleading hidden fees, overcharges for services and CenturyLink’s failure to deliver discounts that they promised to consumers when they signed up for services.”
He cited an “Internet Cost Recovery Fee” that originally was 99 cents, but rose to $3.99. To customers, it appeared as an industry standard fee or tax, but was entirely profit generating for CenturyLink.
CenturyLink also failed to honor fixed-price contracts by adding in fees, and routinely misquoted and overbilled customers.
A complaint filed in Denver District Court described how between 2014 and 2017, CenturyLink advertised a $19.95 price-locked promotion for Internet service. “No rising price for 5 years. 1 Monthly price. No contract,” the ad read.
In mid-2016, however, CenturyLink increased the monthly price by 20% simply by raising its so-called cost recovery fee. The complaint alleged that it was “confusing and misleading” as well as contradictory for CenturyLink to advertise a fixed price while also, in small print, disclaiming that the price “excludes taxes, fees, and surcharges…. Additional restrictions apply. CenturyLink may change, cancel, or substitute offers and services, or vary them by service area, at its sole discretion without notice.”
Since 2014, more than 550 Colorado residents complained to the attorney general’s office. The district court filing claimed that CenturyLink’s own employees did not clearly understand the company’s many limitations and conditions attached to offers of service.
“In at least one call center, CenturyLink added to the pressure by sending all customer service representatives hourly updates detailing how much each individual representative was selling,” the document reported in describing the company’s sales quotas for employees. Those representatives were also instructed to disregard promised offers to customers and instead give them the level of service that CenturyLink policy authorized.
Finally, the complaint alleged that the company failed to keep track of which customers returned their rented modems and cable boxes, and therefore erroneously charged customers for equipment that was in CenturyLink’s possession. Those charges generate “substantial revenue” for CenturyLink.
The consent judgment between CenturyLink and the state requires $1.7 million in refunds to customers for overbilling, and a payment of nearly $6.8 million to the state for violating the Colorado Consumer Protection Act. Weiser’s office said that “if feasible and practicable” it will return the money to CenturyLink customers. Otherwise, the money will go toward further fraud prevention efforts.
CenturyLink denied any wrongdoing and entered into the judgment to prevent further litigation. However, it has agreed to disclose the actual prices of its service in advertisements, eliminate the cost recovery fee for future orders, and refrain from charging customers who return their equipment within the deadline.
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