Cox Communications is set to pay $13 million to settle an Arizona lawsuit that alleged the cable TV company disguised price hikes as “routine fees.”
The lawsuit accuses Cox of deceiving Arizonans who bought TV services from the provider to enter long-term contracts by promising a “price lock guarantee” and other fixed pricing “deals,” according a release from to the Arizona Attorney General’s Office.
Between January 2014 and March 2021, Cox raised prices for the price-lock customers through broadcast, regional sports, and telephone-related fees. The lawsuit said the cable TV company failed to adequately explain these fees to customers. In addition, the company implied that the telephone-related fees were also a tax by listing them alongside government taxes, fees, and surcharges.
This comes as the Federal Trade Commission has been cracking down on deceptive pricing practices in the cable TV industry. Last year, the FTC proposed a rule that would ban hidden fees — like the ones Arizona customers incurred — that are used to drive up the cost of TV services.
On its website, Cox denied that the charges were illegal.
“They were a common pricing practice in the cable industry, and they reflected the rising costs of providing regional sports and broadcast programming. Cox entered into this settlement to resolve a dispute with the Arizona Attorney General, and the settlement agreement does not find that Cox did anything illegal or unlawful,” the company said.
The settlement includes a $10 million payment to the state of Arizona and over $3 million distributed by Cox to current and former customers who signed up for TV services between January 2017 and March 2021.
“This substantial settlement holds Cox accountable for years of deceptive charges and false promises. We’re sending a clear message that businesses must fairly and honestly disclose all fees and honor the guarantees that they make to Arizonans,” Attorney General Kris Mayes said in a statement.
In an FAQ on its website, Cox said it will distribute the approximately $12 settlement payments as credits to “all eligible Arizona customers who still have active Cox accounts at the time the credit is issued.”
Cox said it plans to start issuing credits to current Arizona customers as soon as possible and expects to complete those refunds by September.
The news was reported earlier by Arizona’s Family.
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