Washington state sues Comcast, says it sold near-worthless service plans

Jon Brodkin

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Washington State Attorney General Bob Ferguson today announced a $100 million consumer protection lawsuit against Comcast, alleging that the nation's biggest cable company "engag[ed] in a pattern of deceptive practices constituting more than 1.8 million individual violations of the Washington Consumer Protection Act." Comcast's conduct affected about 500,000 customers who purchased service protection plans in Washington, Ferguson said.

State officials filed the lawsuit (full text) in King County Superior Court, seeking refunds for consumers. The "lawsuit accuses Comcast of misleading 500,000 Washington consumers and deceiving them into paying at least $73 million in subscription fees over the last five years for a near-worthless 'protection plan' without disclosing its significant limitations," the state AG's announcement said. "Customers who sign up for Comcast’s Service Protection Plan pay a $4.99 monthly fee ostensibly to avoid being charged if a Comcast technician visits their home to fix an issue covered by the plan."

Washington said it alleges 1.8 million violations because Comcast made false claims regarding the scope of its service protection plans to 700,000 customers, and "deceptively represented the scope of its Customer Guarantee to over 1.17 million Washington consumers." Comcast allegedly led customers to believe that they needed to buy service protection plans to get services that were actually covered for free by the "Customer Guarantee."

Comcast routinely claimed that the $5-per-month plan covered the cost of all service calls, but "did not appropriately disclose that the plan does not cover repairs to any 'wall-fished' wiring—wiring inside a wall—which constitutes the vast majority of wiring inside homes," the AG's announcement said.

Comcast will "vigorously defend" itself against the lawsuit, a Comcast spokesperson told Ars. The company hadn't yet seen the complaint when contacted by Ars, but said that it is surprised by the lawsuit because Comcast has addressed the problems raised by the attorney general.

“The Service Protection Plan has given those Washington consumers who chose to purchase it great value by completely covering over 99 percent of their repair calls," Comcast said. "We worked with the Attorney General’s office to address every issue they raised, and we made several improvements based on their input. Given that we were committed to continue working collaboratively with the Attorney General’s office, we’re surprised and disappointed that they have instead chosen litigation. We stand behind our products and services and will vigorously defend ourselves.”

Comcast's claim that its plan covers 99 percent of repair calls doesn't change the fact that it made deceptive promises to customers, Ferguson said. "You cannot be deceptive in how you promote a product, period," he said.

Ferguson said he filed the lawsuit because negotiations with Comcast didn't produce a satisfactory settlement. To avoid litigation, Ferguson said Comcast would have needed to offer enough money to address the harm caused to consumers and the gravity of the deception.

The lawsuit also accuses Comcast of credit check violations, saying the company "improperly obtained a deposit from over 6,000 Washington consumers."

"New Comcast customers must undergo a credit screening prior to obtaining services unless they pay Comcast a deposit to avoid the screening," the lawsuit said. "Comcast also requires customers to pay a deposit if the credit screening process reveals the customer has a low credit score. However, Comcast obtained a deposit from thousands of Washington customers with high credit scores, revealing that they improperly ran credit checks on customers who paid a deposit to avoid the credit check, and/or improperly collected deposits from customers who were not required to pay a deposit."