Charter Communications has agreed to pay out $62.5 million in consumer refunds as part of a $174.2 million settlement with the New York state attorney general’s office over claims that it defrauded customers by promising speeds its equipment couldn’t deliver.
The company rented out modems and routers that couldn’t deliver advertised speeds and didn’t build enough network capacity to actually deliver those speeds, according to the attorney general’s office.
“This settlement should serve as a wakeup call to any company serving New York consumers: fulfill your promises, or pay the price,” said Attorney General Barbara Underwood in a statement. “Not only is this the largest-ever consumer payout by an internet service provider, returning tens of millions of dollars to New Yorkers who were ripped off and providing additional streaming and premium channels as restitution – but it also sets a new standard for how internet providers should fairly market their services.”
As part of the settlement, Charter will:
- Provide a $75 refund to more than 700,000 subscribers who leased an inadequate Wi-Fi router or cable modem, or subscribed to a “Time Warner Cable legacy speed plan of 100 Mbps or higher.”
- Provide an additional $75 to more than 150,000 subscribers who had an inadequate modem for at least 24 months.
- Offer free streaming services to 2.2 million customers, including three free months of HBO or six free months of Showtime to customers receiving both internet and TV service who don’t already subscribe to both channels, or a free month of Charter’s Spectrum TV Choice streaming service plus a free month of Showtime for all other customers.
Charter has agreed to pay out the refunds within 120 days, according to Underwood’s office. Going forward, the company has pledged to test its network speeds and discontinue particular plans if it determines it can’t deliver the speeds it’s promising.
“We are pleased to have reached a settlement with the Attorney General on the issue of certain Time Warner Cable advertising practices in New York prior to our merger, and to have put this litigation behind us,” the company said in a statement shared with Fast Company. “Charter has made, and continues to make, substantial investments enhancing internet service across the state of New York since our 2016 merger, as acknowledged by the Attorney General in this settlement. We look forward to continue providing the best TV, Internet, Voice and Mobile products to our customers, and to bringing broadband to more homes and businesses across the state.”