Cox Communications will pay $13 million to resolve an Arizona lawsuit alleging that the cable TV firm concealed pricing increases as “routine fees.”
According to a press statement from the Arizona Attorney General’s Office, the complaint accuses Cox of duping Arizonans who purchased TV services from the provider into entering long-term contracts by providing a “price lock guarantee” and other fixed pricing “deals.”
Cox hiked charges for price-lock subscribers through broadcast, regional sports, and telephone-related fees between January 2014 and March 2021. According to the lawsuit, the cable television company failed to sufficiently disclose these fees to subscribers. Furthermore, by placing the telephone-related expenses alongside government taxes, fees, and surcharges, the firm inferred that they were also a tax.
This comes at a time when the FTC is pushing down on deceptive pricing practices in the cable TV business. Last year, the FTC proposed a rule that would prohibit hidden surcharges, such as the ones Arizona customers faced, from being used to raise the cost of television services.
Cox denied the charges were illegal on its website.
READ MORE: FOX, CBS, And Cox All Agree To Pay $48 Million To Settle Claims That They Fixed The Prices Of TV Ads
“They were a standard pricing strategy in the cable industry, reflecting the rising costs of providing regional sports and broadcast programming.” “Cox entered into this settlement agreement to resolve a dispute with the Arizona Attorney General, and the settlement agreement does not find Cox to have done anything illegal or unlawful,” the company stated.
The settlement includes a $10 million payment to the state of Arizona, as well as more than $3 million disbursed by Cox to current and former consumers who signed up for television services between January 2017 and March 2021.
“This significant settlement holds Cox accountable for years of false charges and promises.” “We’re sending a strong message to businesses that they must fairly and honestly disclose all fees and honor the promises they make to Arizonans,” Attorney General Kris Mayes said in a statement.
Cox stated in a FAQ on its website that the approximately $12 settlement payments will be distributed as credits to “all eligible Arizona customers who still have active Cox accounts at the time the credit is issued.”
Freestar Cox stated that it intends to begin distributing credits to current Arizona customers as soon as possible, with the goal of completing refunds by September.
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