If there’s one (of many things) customers don’t like seeing on their monthly statement, it’s a frivolous charge. It’s not surprising that when Time Warner started sending out notifications alerting customers to a monthly $3.95 modem rental fee, the results were less than enthusiastic. Now the company is being hit with a class action lawsuit in New York and New Jersey.
The basis for the lawsuit is the claim that Time Warner failed to follow its own policy, which states that customers will be given a 30-day notice before prices are increased. The fee went into effect back on October 15, however, netting the company approximately $40 million per month. The company plans to use the additional revenue for infrastructure and service improvements.
Customers were given the option to buy their own modemn as a way to avoid the monthly rental fee. There’s a catch, however; only devices that Time Warner approves can be used, with every option costing more than it would to rent a modem. The lawsuit alleges that customers who don’t want to buy a more expensive option are being forced to pay a monthly fee on old, outdated equipment.
Said Steven Wittels, one of the lawyers involved, “It’s just a scam to increase revenue.” Meanwhile, lawyer Richard Roth says, “You can’t do this to the little guy.” According to Roth, the addition of the fee was not only a breaking of contract, but also consumer fraud. The lawsuit requests that the fee be blocked in both states.
[via ars technica]