The cable and satellite TV industries came under heavy fire today during a Senate hearing on customer service and billing in the industry, an event underscored by the release of a pair of lengthy Senate investigations into the issues. Executives from Comcast (NASDAQ: CMCSA), Charter Communications (NASDAQ: CHTR) and other providers sought to downplay and deflect criticisms of their business practices, while also acknowledging they have work to do to improve their practices and reputations.
As reported by Multichannel News, Comcast's Tom Karinshak was the first industry representative to speak during the hearing. Karinshak, SVP of customer service for Comcast, said the cable industry has not always made customer service the priority it should have been, adding: "I am sorry for that."
The hearing today by the Senate Permanent Subcommittee on Investigations was spearheaded by Sen. Claire McCaskill (D-Mo.), who released two reports she said highlighted the problems in the cable and satellite TV industries. "Why is there so much #customerdisservice in cable industry? No competition. 61% of households only have one cable option," McCaskill's office tweeted during the hearing.
McCaskill's first report, titled "Some cable and satellite companies do not refund customer overcharges," zeroed in on Charter and Time Warner Cable's businesses during the past six years (TWC was recently acquired by Charter). Among the findings of the report:
- Time Warner Cable and Charter made "no effort" to trace equipment overcharges to their origin, unless customers specifically asked them to.
- "Between January and April 2016, Time Warner Cable overbilled customers nationwide an estimated $639,948. The Subcommittee projects that, in 2016, Time Warner Cable will overbill customers nationwide a total of $1,919,844."
- Charter told the Subcommittee that it overbilled customers by at least $442,691 per month, and is unable to be more specific.
- While the report was especially critical of Charter and TWC, "Comcast and DirecTV provided full refunds to overcharged customers, and Dish's sophisticated billing system is designed to prevent these types of issues from occurring in the first instance."
"As a result of this investigation, both Time Warner Cable and Charter have taken steps to address these issues," the report noted. "Each month, Time Warner Cable performs an audit comparing its billing records with service records. Going forward, the company will provide an automatic one-month credit to anyone who is identified in the audit as having been overcharged. Time Warner Cable will not, however, investigate when it began overcharging customers unless customers bring specific concerns to the company's attention, nor will it provide a full refund dating back to when the overcharge began. Similarly, Charter will provide customers with a one-year credit for any equipment overcharges. Charter has also implemented systemic controls that it says will prevent equipment overcharges in the future."
A separate report from McCaskill focused on the industry's customer service and billing practices, arguing that many cable and satellite customers "have been frustrated by the cost and complexity of their bills." The report also noted that service prices continue to rise by as much as 33 percent.
"Our investigation found that customers faced difficulties getting their problem resolved by their cable or satellite provider," the report said. "In December 2015, for instance, 40% of a sample of customers who called Comcast with a billing problem were unable to resolve it on the first call. In December 2014, DirecTV found that 36% of callers contacting the billing department were unable to fully resolve their issue. Charter noted that approximately 20% of callers were not able to solve their problem on the first call. In addition, based on 2015 customer survey data provided by Time Warner Cable, only 42% of customers agreed that Time Warner Cable 'has the ability to resolve your problem on the first call.'"
The report added that cable and satellite providers have acknowledged the need to improve their customer service, and "provided information to the Subcommittee regarding their efforts to identify and address customer pain points and improve the customer experience."
The Senate hearing is just the latest in a long line of black eyes the cable and satellite TV industries have suffered in the public relations arena. In response, Comcast, Charter and others have said they continue to invest in their customer service businesses with the goal of improving their services and mending the industry's' image.
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