Bravo – Class Action Seeks to Require Automatic Refunds When Service Providers Fail – Co
One of the frustrations of modern life is that service providers fail to provide automatic refunds or credits when they fail to provide service. Instead, bandits such as Comcast provide refunds only if a customers spends their valuable time wading through layers of voice prompts or websites to submit a request for a refund. By that approach, entities such as Comcast:
1) externalize to customers the costs of Comcast’s failure to plan for or provide actually working service, and 2) Comcast keeps money it has not earned because it knows that most customers will not take the time to demand a refund because the the transaction cost of time is so high.
This gaming of the process is a prime example of the negative aspects of financial engineering. That is, businesses and their lawyers look for and then engineer in structural impediments to having to pay the full cost of their failures. This same gaming of the system also illustrates the failure of regulation – if we had decent regulation of broadcast services for internet access or tv access, Comcast and other entities would long ago have been forced to end this unfair business practice.
So, bravo to the filers of a recent class action seeking to require Comcast to issue automatic refunds to customers who lost service due to a storm. The complaint is here, with a hat tip to LAW360 for flagging the case. One hopes the complaint is successful, and that similar class actions follow on every outage. Maybe then Comcast and the power companies will finally invest in service lines that are made pretty much 100% weather proof.
Investment in weather-proof service would spark howls because it will result in rate increases, but it seems far better to pay the costs now and avoid the future failures. Moreover, with laborers and others needing work these days, now would be an ideal time for utilities and broadcasters to make the investment. Perhaps the utilities and Comcast could be "nudged" by rules which deprive them of favorable tax rates or TIFF deals if they fail to invest in weather-proof service. The financial engineers will do that math in a hurry. But until we have effective nudges or required regulations, it’s up to the plaintiff’s class action bar, and I wish them great success.
Plaintiff’s counsel – Jeffrey S. Morneau – is online here.
a portion of the Relevant Period, Defendant failed to automatically give its customers a credit,refund, or bill adjustment for the cable television, Internet, and/or telephone services notprovided to them. Plaintiffs bring this class action Complaint on their own behalf and on behalf of all other individuals in Massachusetts who were damaged as a result of Defendant charging itscustomers in advance for cable television, Internet, and/or telephone services, failing to provideits customers with cable television, Internet and/or telephone services during at least a portion of the Relevant Period, stymying or preventing its customers from getting a credit, refund, or billadjustment for cable television, Internet, and/or telephone services during the Relevant Periodthat it knew it could not and actually did not provide, and/or failing to automatically give itscustomers a credit, refund, or bill adjustment for cable television, Internet, and/or telephoneservices during the Relevant Period. Plaintiffs seek damages to compensate themselves and theClass.