Attorney General Weiser Announces Settlement In CenturyLink Case

DENVER - Attorney General Phil Weiser today announced that CenturyLink will pay $8,476,000 for unfairly and deceptively charging hidden fees, falsely advertising guaranteed locked prices, and failing to provide discounts and refunds it promised to consumers who signed up for internet, television, and telephone services in Colorado.

“One of CenturyLink’s main selling points is that its prices are low and affordable. Yet, we received hundreds of complaints from consumers that their bills were more than the advertised price or the price that sales agents quoted them. This sticker shock often was a result of misleading hidden fees, overcharges for services, and CenturyLink’s failure to deliver discounts that they promised to consumers when they signed up for services,” the Attorney General explained. “CenturyLink’s conduct broke the law: they deceived consumers by telling them they would pay one price, then charging them more. The settlement we are announcing today holds CenturyLink accountable and provides relief to consumers they harmed with their deceptive conduct.”

The Consumer Protection Section of the Attorney General’s office began investigating CenturyLink’s conduct in October 2017. The investigation uncovered evidence dating back to 2014 that the company systematically and deceptively overcharged consumers for services.

One example of that process was evidenced by how CenturyLink misled customers over the cost of its internet service by adding a disguised surcharge to bills called an Internet Cost Recovery Fee. That fee started at $.99 per month then increased to $3.99 per month. CenturyLink listed this surcharge along with other industry standard and government fees on customers’ monthly bills, leading customers to believe it was a standard fee or tax for products or services. Instead, the fee was a hidden price increase that CenturyLink kept for itself to generate profit.

In addition, CenturyLink falsely advertised “price lock” and “fixed price” contracts while fully intending to charge customers more than the advertised price. For example, a 2015 mailer offered internet services for $19.95 per month and guaranteed that the price would be locked in for five years. However, CenturyLink charged more than the advertised price by adding the Internet Cost Recovery Fee, and then later increased the overcharge by increasing the fee. Because of this sleight of hand, the advertised price was not the actual price, nor was it “locked” or “fixed.”

On top of the deceptive nature of its Internet Cost Recovery Fee and price lock offers, CenturyLink’s complex promotional pricing schemes and outdated billing system resulted in routine misquotes to consumers. The company also gave sales agents incentives to deliberately mislead customers about the price of services. Sometimes, CenturyLink billed customers more than twice the rate they had been promised, and in many cases promised discounts were simply not delivered.

Finally, when customers ended service with CenturyLink, the company sometimes failed to deliver a refund when equipment was returned, only finally auctioning a refund when customers persisted with their request by calling and proving that the equipment had indeed been returned.

Under an agreement filed in Denver District Court today, CenturyLink will refund customers $1,701,000 for overbilling errors by March 31, 2020. In addition, CenturyLink will pay $6,775,000 to the State of Colorado for violating the Colorado Consumer Protection Act. If feasible and practicable, the Attorney General’s office will then return this money to the customers who were impacted by CenturyLink’s conduct. Any remaining funds will be used to protect Coloradans from fraud or violations of the state’s antitrust laws.

In addition, in order to protect consumers from any future such violations, CenturyLink has also agreed to:

• Disclose the actual price of its services, including charges and fees, at the time of sale and in sales materials and advertising;

• Send the customer an “Order Confirmation” that includes a complete bill summary within three days after a customer orders services from CenturyLink;

• Stop adding the Internet Cost Recovery Fee to future orders; and

• Stop charging unreturned equipment fees to customers who return equipment on time.

CenturyLink must also submit compliance reports to the Consumer Protection Section of the Attorney General’s Office for the next three years, and must keep all sales call recordings and written sales correspondence for the next two years.

“I am committed to enforcing our consumer protection and antitrust laws, and to holding businesses accountable when they harm Coloradans,” the Attorney General added. “Today’s settlement sends a clear message that businesses must fairly and honestly disclose all fees and charges and that they must honor the prices that they quote to Colorado consumers.

Weiser added that his office will continue to investigate instances where Coloradans are being subjected to hidden fees and unfair price increases.

Copies of the legal documents associated with the case can be found online courtesy of the Attorney General’s office. The formal complaint the Attorney General’s office initially filed can be viewed at: https://coag.gov/app/uploads/2019/12/Century-Link-Complaint_Settlement.pdf

The consent judgment that was filed at the Denver District Court today can be viewed at: https://coag.gov/app/uploads/2019/12/Final-CO.CTL-Consent-Decree-51040337v1-51040487v1.pdf