NY AG Reaches Record $174.2M Consumer Fraud Settlement With Charter

The New York Attorney General’s Office has reached a $174.2 million settlement with Charter over charges that the company promised faster and more reliable internet service to customers than it actually delivered.

Charter, which operated its cable service as Time Warner Cable before it started operating it as Spectrum, will fork over $62.5 million in refunds to more than 700,000 customers as part of a settlement — the “largest-ever payout to consumers by an internet service provider in U.S. history,” the attorney general’s office said.

Individual customers will receive between $75 and $150 in refunds, according to the office.

"This settlement should serve as a wake-up call to any company serving New York consumers: fulfill your promises or pay the price," Attorney General Barbara Underwood said 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,” she added.

The attorney general’s office hit Charter with a lawsuit in New York State Supreme Court in 2017 claiming the internet the company was providing to customers wasn’t as speedy or reliable as it had promised.

The suit accused Charter of leasing “deficient” modems and wireless routers customers, charging customers for download speeds that it wasn’t actually able to deliver and “engaging in hardball tactics with Netflix and other popular third-party content providers that, at various times, ensured that subscribers would suffer through frozen screens, extended buffering and reduced picture quality.”

Charter also told customers that its internet speeds would work just as well on a wired network as on a WiFi one, when they were actually slower on WiFi, according to the suit.

As part of the settlement, Charter will contact customers that are eligible for refunds within 120 days, the attorney general’s office said.

Charter will also offer around 2.2 million customers free streaming services including HBO or Showtime “with a retail value of over $100 million,” according to the office.

Charter has already doled out more than $6 million in refunds unrelated to Wednesday’s settlement “for inadequate modems,” the attorney general’s office said. Customers that already received money as part of those refunds won’t be eligible for another refund.

Since the attorney general’s office launched its investigation, Charter has “made significant investments” to address the issues described in the lawsuit, the office noted.