An Illinois judge has approved the settlement of a class-action lawsuit on late fees that will result in service rebates to some Charter Communications Inc. customers.
The settlement of the 1999 lawsuit affects all Charter customers except those in California, Connecticut, Maryland, Oklahoma, Vermont and Washington. Charter officials said it was honest in its dealings with late-paying customers and negotiated the settlement to avoid "significant costs in time and money," according to a case-related Web site posted by the MSO.
The class-action suit claimed Charter used its late fee as a revenue generator and did not adequately explain due dates or how to avoid late penalties. Plaintiffs included past and present Charter subscribers who dealt with the company between 1996 and Sept. 28, 2000, when the parties reached a preliminary settlement.
The settlement was approved Dec. 21 by Madison County (Ill.) Circuit Court Judge Phillip Kardis. Charter has six months to begin honoring the rebates. That means subscribers in the affected states will receive settlement packages next May.
The proposal calls for a one-time rebate of $9.95 to former customers that paid a late fee and filed a claim with proof of their past late-fee payment.
Current customers receive two free services: one that would include free digital cable or cable-modem installation or the addition of an additional outlet; plus a choice of a free month of digital basic or two free pay-per-view movies. Customers can't use that choice for a free PPV event, like a high-profile boxing match.
Though the settlement initially calls for a reduced late-fee amount, the agreement retains charges of more than $5 to be used against the most egregious late-payers.
During the first year after the settlement, Charter will charge a fee of $2.95 for late bills. That levy will be applied only after a payment is 45 days late.
In 2002, the fee will increase to $3.25 and the trigger date will change to 30 days after the original bill arrives. When that payment is 45 days late, the MSO may tack on another $1.70 penalty.
Those who repeatedly pay late would be subjected to higher late fees: a $3.25 charge on a second late payment within the same year, and another $2.70 assessment on that same bill if the consumer doesn't pay off the obligation within 45 days of the original bill.
The MSO anticipates satisfying the settlement terms by the end of 2001.
The resolution is similar to a settlement reached in November on behalf of former Tele-Communications Inc. customers in Indiana Superior Court in Martinsville. That arrangement will result in two free movies for the now-AT & T Broadband customers throughout the U.S.
Customers who can't get PPV can choose either a free month of HBO, Showtime or Cinemax or three free months of Starz!. If they also need a converter to take advantage of the offer, they can get a free set-top for two months. Consumers who already get all the premium channels will receive a $6.95 rebate.
AT&T Broadband will also modify its late charge to $2.95, which would be triggered after a 30-day payment delay.
Another $2 will be tacked on at the 45-day level.