Comcast Unauthorized Charges (2014-2019)

Justin Illes

Business Ethics 211-07

11/29/2020

Comcast Unauthorized Charges (2014-2019)

Abstract

            Comcast is a cable company that offers its customers internet and cable services. Over the course of many years, customers have publicly spoken out about being overcharged as well as having unauthorized charges show up on their accounts. Comcast reported that due to the lack of security measures, unauthorized users were able to access accounts and fraudulently purchase anything on the account.

 Based upon which ethics theory used Comcast’s actions would be analyzed in various different ways. Utilitarians believe that the ethical choice is one that will produce the greater good for the largest number of people. They would see Comcast’s actions as a failure to maximize happiness for all of their customers because by selling the information that the customers have provided as well as the lack of security allowed people to hack into customers’ accounts and charge anything they want. Individualists theorize that decisions should be based on self-interest assuming that the decisions made will benefit everyone. Individualists would back Comcast and say they did nothing wrong because it was in the best interest of the company to make more money and in turn provide a better service. Kantians believe in the formula of humanity which states that nobody should be treated as just a mere end to a means. Kantians would disagree with the actions of Comcast because they were using their customers as just mere objects in order to maximize profit. Lastly, virtue theorists would argue that Comcast was being greedy, disrespectful, and dishonest because they did nothing to change the way that they were operating for years although they knew what had come from their mistakes. Comcast must focus on boosting security for customers as well as making it clear to the customer what they are being charged with. In order to solve this problem completely, they must get permission from the customer whether or not they are allowed to sell their personal information.

Ethics Case Controversy

            Comcast is a media and technology company which on their website claim to be, “built on integrity and respect, and we believe that all of our employees have a responsibility to promote the highest ethical standards and comply with the law everywhere we operate” (Comcast, 2020). They are based out of Philadelphia, Pennsylvania, and were founded on June 28, 1963, by Ralph J. Roberts, Julian A. Brodsky, and Daniel Aaron.

In June 2018 Elizabeth O’Neil filed a lawsuit against Comcast claiming that they used existing cables and internet subscribers’ personal information to open Xfinity Mobile accounts without their knowledge or consent. This was all due to the lack of security measures which allowed unauthorized users to easily access these accounts and fraudulently purchase cell phones. The plaintiff  “brings three counts, arguing: (1) Defendants violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1, et seq., by opening Xfinity Mobile accounts without subscribers' consent or knowledge, and failing to protect subscribers' personal information from unauthorized third parties; (2) Defendants breached an implied contract to reasonably safeguard subscribers' personal information; and (3) Defendants unjustly enriched themselves at the expense of Plaintiff and the putative class. (Compl. ¶ 6.)” (Casetext, 2018). In order to sweep this issue under the rug Comcast adjusted revised their user agreement in 2017 and the provision states, "[a]ny dispute involving you and [Comcast] shall be resolved through individual arbitration." (Id. at § 13(a).)” O'Neil v. Comcast Corp., Case No. 18 C 4249, 4 (N.D. Ill. Feb. 27, 2019)” (Casetext, 2018). This was Comcast’s attempt to keep all issues in house so that they did not have to deal with anyone second-guessing the decisions that they made within the company and so that nobody could take them to court and if they did they were going to lose because the customer already knows about the circumstances and signed off on them under the 2017 subscriber agreement. Comcast defines “dispute” as “any dispute, claim or controversy related to us or our relationship, including but not limited to any and all: (1) claims for relief and theories for liability, whether based on contract, tort, fraud, negligence, statute, regulation, ordinance, or otherwise; (2) claims that arose before this or any prior Agreement; (3) claims that arise after the expiration or termination of this Agreement; (4) claims that are the subject of purported class action litigation." (Id. at § 13(b).)” (Casetext, 2018). By defining “dispute” in this manner it allows Comcast to terminate anyone or any disputes that may arise from unhappy customers’. They created a loophole for themselves to get out of any claims that may arise from their actions. Comcast gives subscribers a thirty-day window of opportunity to opt-out of the arbitration agreement with “no adverse effect” to the subscriber. Below is recent concern about fraudulent charges in July of 2020.

In this screenshot, a customer discusses their concern about a fraudulent charge when they went to cancel their security which would cost them an additional $400 to what they are already paying. The customer was able to have the additional security canceled but was still faced with a monthly charge of $550 which they are not able to pay. This backs Elizabeth's argument that customers are having every penny squeezed out of them because when a customer wants to resolve an issue that they did not create Comcast will claim that it was the customers’ fault and continue to charge them.

In the case review Elizabeth makes a final attempt “to thwart arbitration, Plaintiff argues that the 2017 Subscriber Agreement is procedurally unconscionable as applied to her claims. Under Illinois contract law, an agreement may be unenforceable if it is procedurally unconscionable. Phoenix Ins. Co. v. Rosen, 949 N.E.2d 639, 647 (Ill. 2011). Procedural unconscionability consists of "some impropriety during the process of forming the contract depriving a party of meaningful choice." Id. (citation omitted). It applies when a contract term is "so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware he was agreeing to it." Razor v. Hyundai Motor Am., 854 N.E.2d 607, 622 (Ill. 2006). Procedural unconscionability also takes into account a lack of bargaining power. Id.” (Casetext 2018). The contract term was "so difficult to find, read, or understand that the plaintiff cannot fairly be said to have been aware he was agreeing to it." Comcast defends this by claiming that the arbitration provision is not “hidden in a maze of fine print” so the defense that Elizabeth is making is not valid in this case because the subscriber agreement was properly written and drafted clearly for those who signed it.

In conclusion, the “Defendants' Motion to Compel Individual Arbitration and Stay Litigation (Dkt. No. 21) is granted pursuant to 9 U.S.C. §§ 3, 4. Plaintiff shall comply with the written arbitration agreement in the 2017 Subscriber Agreement. This action is stayed in its entirety during the pendency of any resulting individual arbitration proceeding.” (Casetext, 2018). Elizabeth did not win the case and is forced to comply with the subscriber agreement that she signed when she subscribed to Comcast in 2015. Due to the fact that Elizabeth opter out of the arbitration requirement within 30 days of her Xfinity service activation there were no laws broken by Comcast.  

Stakeholders

            The value of a company as well as the future of a company depends on how the stakeholders view the decisions they make. In order for a person or a business to sign up for any of the services that Comcast provides they must trust the security and the product that is being provided. Over the years the company has received thousands of complaints from customers due to customers receiving fraudulent charges to their account. The CEO of Comcast, Brian Roberts, is the face of the company and can have his reputation ruined based upon how the stakeholders view the fact that they charged the customers more than what they should’ve been. Although the case did not end with repercussions if the companies they supply view the case as negative they may cancel their contracts which would cost Comcast millions and lower the value of the company.

Individualism

            Individualists make long-term decisions based on self-interests which they believe will benefit everyone in the long run if they do this because as a business owner you know what’s best. This perspective aligns with how Comcast thinks because when they made the decision to create revisions on their term agreement they were acting in their own self-interest to ensure that if there were any problems they would be able to resolve them within the company.

            Although there were no repercussions for Comcast’s actions there have been many other instances where people have claimed that Comcast has mischarged them or overcharged them and in some cases there were fraudulent charges. The way that Comcast went about it was not unethical in the perspective of an individualist because they would agree with the fact that Comcast acting based on self-interest by changing their definition of “dispute” to "[a]ny dispute involving you and [Comcast] shall be resolved through individual arbitration." (Id. at § 13(a).)” O'Neil v. Comcast Corp., Case No. 18 C 4249, 4 (N.D. Ill. Feb. 27, 2019)” (Casetext, 2018). By specifically defining “dispute” Comcast was able to fight anyone in court and win because when a customer would sign the 2017 agreement they would have already known that if they made a dispute it would be handled in house.

            Some individualists would argue that Comcast is just trying to maximize their profits which is why they would change all the agreements to be much more beneficial for the company so that if they were to have in house issues they would never be in legal trouble due to the clauses placed within the agreement revised in 2017.

Utilitarianism

            Utilitarian’s believe that the ethical choice is one that will produce the greater good for the largest number of people. They would see this as a failure to maximize happiness. Customer’s gave Comcast their information with the notion that it would not be shared or sold when in reality that is exactly what Comcast was doing. They claim that, “Company’s culture is built on integrity and respect, and we believe that all of our employees have a responsibility to promote the highest ethical standards and comply with the law everywhere we operate” (Comcast.com, 2019).

             Utilitarian’s want to maximize happiness for the largest amount of people and by selling customer information, sweeping complaints under the rug, and failing to increase security on accounts Comcast is not doing everything they can in the greater good for their customers. Utilitarianist’s would not agree with the decision making of Comcast which would harm the perspective and reputation of the company subsequently lowering stock prices and decreasing the value of the company as well as employees. When the case came out the stock price of Comcast dropped $14 in just two days which was a huge dive in comparison to where they were. Comcast was not maximizing happiness for customer’s and they weren’t maximizing happiness for their employees either because the employees stocks were losing value which did not increase their overall happiness.

            Overall, utilitarian’s would not agree with the decision making of Comcast because they failed to produce greater good for more people than they harmed.

 

Kantianism

            Kantians would disagree with the actions of Comcast because they were using their customers as just mere objects in order to maximize profit. Lastly, virtue theorists would argue that Comcast was being greedy, disrespectful, and dishonest because they did nothing to change the way that they were operating for years although they knew what had come from their mistakes.

            Comcast was using its customers as a means to end by selling their information as well as not investing in security. While it may seem that there was no issue with security the fact that people were able to hack people’s accounts and order cell phones without any authorization from the account user must show that there was an issue. Comcast could’ve upgraded their security but they might not make as much money because although other people were ordering it the company was still making money off of the customer’s that had these charges. Kantians believe in the formula of humanity which does not look like Comcast follows. They are more concerned about gaining customers so they can profit off of them solely to sell their information or get them to sign up for as many outlets possible that they offer.

            In conclusion, based on the Kantian perspective they do not agree with the decisions that Comcast has made with the agreement that locks their customers in as well as the security measures that Comcast took. Kantian’s would not agree with any decisions that Comcast has made over the course of the last few years because they focus more on profit of their company than overall happiness of the customers.

Virtue Theory

Virtue theorists would argue that Comcast was being greedy, disrespectful, and dishonest because they did nothing to change the way that they were operating for years although they knew what had come from their mistakes. Comcast changed the way that there agreement was worded so that it was more beneficial for themselves and less so for their customers instead of changing the security issues that they had.

Comcast was no wise with the decisions they made and was lucky that they won the case because of the wording of their document. A virtue theorist believes in four main virtues which are wisdom, justice, fortitude, and temperance. Comcast had mental fortitude during their case and was able to benefit themselves but never able to help out their customers during the process. Comcast does not have temperance though because they were always thinking about themselves before the customer. A company should focus on security before they focus on any other aspect of their company because a customer is their most important asset but it does not seem like Comcast felt this way. Virtue theorists would not agree with the decision making from the company and wouldn’t agree with the changes that were made to the subscriber agreement in order to ensure that the customer did not have the control in any situation that they were put in.

Virtue theorists are much like Kantians and neither would agree with the fact that Comcast uses their customers to get the most financially that they can. They put fees in place that do not allow people to cancel their accounts because they cannot afford it and they don’t improve security to ensure that people have secure accounts.

Justified Ethics Evaluation

            The way that Comcast has gone about business for the last five years and continues to do business is not ethical. They are getting the most out of their customers that they can and locking them into deals that some have no idea existed in the first place. Comcast was acting based on self-interest by changing their definition of “dispute” to "[a]ny dispute involving you and [Comcast] shall be resolved through individual arbitration." (Id. at § 13(a).)” O'Neil v. Comcast Corp., Case No. 18 C 4249, 4 (N.D. Ill. Feb. 27, 2019)” (Casetext, 2018). This definition gave them full control over their customers whether it was over the phone or in court as we saw previously. Overall, I do not think that Comcasts actions over the past few years regarding this case as well as security are ethical in any form.

Company Action Plan

            In order for Comcast to fix these issues they must first realize that they are happening and admit to them. After they have done that they need to fix their security. They have to hire someone who understands the system and have a team monitoring it at all times to ensure that there are no issues. This will fix most of the fraudulent charge issues that they have had over the years.

            Comcast’s website says, “Company’s culture is built on integrity and respect, and we believe that all of our employees have a responsibility to promote the highest ethical standards and comply with the law everywhere we operate” (Comcast.com, 2019). When you read what they have done over the past five years as well as how they treat their customers this should be a brief apology statement not a company statement about the culture. In order for Comcast to continue to maximize their profit as well as treat their employees and customers with more respect they have to make it clear to everyone how they plan on changing security and dealing with unauthorized charges on the accounts. By doing this it will reassure the customers who have been loyal to the company that they are changing. This will also bring in new customers because it shows that they have changed and are either better than the current provider they have or now they trust the company to not screw them over.

References

Bloomberg Law. “Comcast Customer Must Arbitrate Data Privacy Fight.” Bloomberg Law, news.bloomberglaw.com/tech-and-telecom-law/comcast-customer-must-arbitrate-data-privacy-fight.

Comcast. “Integrity.” Comcast Corporation, 9 Nov. 2020, corporate.comcast.com/values/integrity.

FCC. “Consumer Protections for Cable Bills.” Federal Communications Commission, 16 Mar. 2020, www.fcc.gov/consumers/guides/consumer-protections-cable-bills.

“Fraudulent Charges on Xfinity Bill.” Xfinity Community, 17 May 2020, forums.xfinity.com/t5/Billing/Fraudulent-charges-on-Xfinity-bill/td-p/3337177.

Jon Brodkin - Jan 3, 2019 6:30 pm UTC. “The Lies Comcast Allegedly Told Customers to Hide Full Cost of Service.” Ars Technica, 3 Jan. 2019, arstechnica.com/tech-policy/2019/01/the-lies-comcast-allegedly-told-customers-to-hide-full-cost-of-service/.

O'Neil v. Comcast Corp., Case No. 18 C 4249 (N.D. Ill. Feb. 27, 2019)