Comcast: Fraudulent Charges on Customers’ Accounts (2016)

Controversy

Comcast, an American global telecommunications conglomerate

In May of 2015, a woman from Florida added a couple Latino channels to her Comcast cable TV account that was priced at around $10 a month. Upon receiving the bill later that summer, Comcast had indicated that she had owed them over $300 due to equipment that she never received and other various charges. After contacting customer service, she was notified that she was unable to receive a refund. The Federal Communications Commission (FCC) has examined thousands of cases similar to this and has investigated further within Comcast. They found that there were numerous cases of customers being charged for services they never asked for. This also included a former Comcast customer, Tom Brock, who claimed that his bill "was supposed to be around $100 per month. And it just started creeping up to $120, $130. Then there were some unknown charges on there I was questioning also". Following this incident, Brock attempted to cancel his services with Comcast but was denied since Comcast claimed that he had signed up for a 3 year contract to which they could not locate after requesting the document. After the investigation was completed, Comcast had agreed to pay a $2.3 million fine. According to the FCC, it is the largest civil penalty ever assessed against a cable provider. The investigation shows just how difficult it is for customers to get refunds for services they never should have been charged for in the first place. 

Stakeholders

Brian Roberts, CEO of Comcast

Stakeholders in this particular case include the affected individuals that received a bill for equipment they did not ask for as well as the company, Comcast itself. After over a thousand complaints from Comcast customers receiving fraudulent charges to their account, under the five-year compliance plan, Comcast must begin sending customers special notifications every time a new charge or service is added to their bill. Brian Roberts, the CEO of Comcast, is also affected since he is the face of the company and may lose a great deal of reputation. Also, some employees of Comcast were considered stakeholders since they were responsible for filing the bills for customers.

Individualism

Individualism is the economic theory that states that the main goal of a business is to increase its profits, while keeping actions within the scope of the law (Desjardins, 2014). Under this theory, Comcast did not comply with the law in any way due to the fact that they imposed charges on customers for services they did not want. With the first case presented, the woman from Florida should have received a refund for the fee but instead brought Comcast to court. Tom Brock also should have received a refund for the monthly charges that kept rising and any cancelling fees he may have been presented with. Having the trust of many customers and loyalty is a very important trait in businesses because it allows them to be confident in the company’s services. If a company’s main goal is to increase profits, doing so while taking advantage of customers that do not pay attention to their bills is not an ethical way to do so. Also with the $2.3 million dollar fine, Comcast is not only losing money, but potential customers as well.

Utilitarianism

Utilitarianism stresses the importance of maximizing happiness in yourself and others (Desjardins, 2014). Also, businesses should aim to maximize happiness in the long run for all conscious beings (Salazar). In Comcast’s case, their practices were not only unethical but it also did not increase the happiness of anyone throughout the entire scandal. It would be in the best interest of those affected to receive some sort of compensation for the faulty charges. This would allow future customers to have a positive view on the company in the long run, which is essential in Utilitarianism's definition. Any customer confusion should be acknowledged by the company and treated accordingly since it made many customers frustrated by irrelevant charges.

The Federal Communications Commission

Kantianism

Kantianism is the ethical theory whereby companies must make rational decisions and be honest and respectful of others (Salazar). It also states that a company should not lie, cheat, manipulate or harm others to benefit the company. Another aspect of Kantianism focuses on being motivated by Goodwill, which is seeking to do what is right because it is right. The "formulation of humanity" states that it is wrong to use people as a mere means to get what you want. In other words, treating someone as a mere means using or exploiting them. It does not account for their rationality and freedom and typically manipulates individuals (Salazar). In Comcast’s case, not only were they lying about the faulty charges, they claimed that those affected were unable to receive a refund. In order to conform to Kant’s principles, Comcast would have been honest if they were incurring the charges on customers’ accounts and issue a refund. Employees of the company were manipulating charges and bills of the customers to try and gain more money.

Virtue Theory

Virtue Theory is the idea of acting to embody a variety of virtuous or good character traits (Salazar). The four primary traits include courage, honesty, temperance, and justice. In order for Comcast to embody courage and honesty, they must first acknowledge the fact that they are taking advantage of customers who did not order specific parts or services. It is basic principle that a cable bill should only include what the customer has ordered, nothing more and nothing less. As for temperance, Comcast would have had to have reasonable expectations for their actions. If they thought they could get away with false billing, then they did not conform to Virtue Theory. Finally, they did not incorporate fair practices as outlined in justice because in the case of Tom Brock, he was charged thousands of dollars for cancelling his services when he should not have.

Justified Ethics Evaluation

In conclusion, Comcast’s unethical practices for incurring charges for services that customers did not request violates all four of the ethical theories. For the Individualist, Comcast was attempting to maximize profits but by doing so unethically and not conforming to the law. When viewing the case from a Utilitarianist perspective, the frustrated customers demonstrated a lack of happiness and therefore, going against all theories of Utilitarianism. From a Kantianist perspective, Comcast was not being honest in their actions and failed to act according to the principles of not lying and cheating their customers. Finally, when analyzing the case from a Virtue Theorist standpoint, it is clear that the company failed to embody good character traits that included justice and courage. After paying a $2.3 million fine from the FCC, it is clear that Comcast’s reputation may be forever tarnished as the trust of many customers are lost with their practices. Not only that, but refusing to refund customers for the charges they did not request is very unethical because it is essentially stealing money. There is no excuse for not having any compensation for them and any ethical business would solve this issue itself instead of going all the way to court.

References

"Adphia Founder Gets 15-year Term; Son Gets 20." NBCNews.com. NBCUniversal News Group, 20 June 2005. Web. 03 Feb. 2017. DesJardins, J. R. (2014). An Introduction to Business Ethics. New York, NY: McGraw Hill. Lakana. "Cable Company Scandal Hits Close to Home." WCYB. N.p., 12 Oct. 2016. Web. 03 Feb. 2017. Reuters. "Here’s How Much Comcast Will Pay to Settle Its Billing Investigation." Comcast Will Pay $2.3 Million to Settle Its Billing Investigation | Fortune.com. Fortune, 11 Oct. 2016. Web. 03 Feb. 2017.

Salazar, Heather. "The Business Ethics Case Manual." The Authoritative Step-by-Step Guide to Understanding and Improving the Ethics of Any Business (2014): n. pag. Web. "The FCC Fines Comcast $2.3M Over Billing Practices—But Is That Enough?" Wired. Conde Nast, n.d. Web. 03 Feb. 2017.el