WASHINGTON - A Senate investigation of cable TV costs released Thursday criticized two major cable companies for consistently failing to provide refunds to customers they knew had been overcharged.
The Senate Permanent Investigations subcommittee found Time Warner Cable and Charter Communications made no effort to trace set-top box equipment overcharges and to provide refunds to customers. "Instead, their practice has been to just pocket the past overcharges," a report on the investigation said.
Time Warner Cable and Charter Communications (CHTR) recently merged.
Sen. Rob Portman, R-Ohio, the subcommittee's chairman, called the overcharges a "rip off" and said thousands of Ohio cable TV customers were affected.
Kathleen Mayo, executive vice president of customer operations at Charter Communications, said a company audit determined that less than 1 percent of its customers using set-top boxes were overbilled. Mayo said the company will explain to customers that they were overcharged and give them a one-year credit.
Time Warner Cable estimates customers were overbilled $640,000 nationwide in the first four months of 2016, according to the subcommittee's report. The company overbilled consumers nationwide by about $2 million annually for the past six years, the report said.
Sen. Claire McCaskill of Missouri, the subcommittee's top Democrat, described how cable TV consumers are lured in with rock-bottom prices that are progressively increased. Byzantine customer service operations only reward consumers willing to get mad to get what they want.
"The business model that has grown up in pay TV is, figure out a way to make the entry price as low as possible, figure out how to roll people off that entry price as quickly as you can and then deal with their anger once they realize the price has gone up," she said. "The angrier they get the more likely they are to get something from you."