Time Warner Cable has become the latest MSO in Indiana to
be hit with litigation over the monthly late fees that it charges its subscribers.
A recent lawsuit filed in Marion Superior Court in
Indianapolis alleged that the $4.65-per-month late fee that Time Warner charges locally on
past-due accounts exceeds any financial losses incurred by the MSO in collecting overdue
The lawsuit -- the result of successful litigation filed
against late-fee charges by Tele-Communications Inc. in Baltimore and Washington, D.C. --
prompted a Time Warner official to complain about "legal opportunists" using the
issue to "drum up business."
Time Warner spokesman Mike Luftman said any fees proposed
by a Time Warner division must first be cleared by the corporate legal department to
ensure that "what they're doing is consistent with state law."
"We're pretty confident with the structure that
we have out there," Luftman said.
Lawyers who filed the lawsuit on behalf of a Time Warner
subscriber in Indianapolis, and who are seeking class-action status, did not return
repeated calls for comment.
However, sources confirmed that the lawsuit alleged that
Time Warner has "monetarily benefited from these overcharges," and it seeks
refunds going back six years for consumers in Indianapolis, Terre Haute, Gas City,
Jonesboro and Marion, Ind.
Meanwhile, the Indianapolis Star/News reported that
on the same day that the lawsuit was filed, Time Warner division president Jay Satterfield
appeared before the Indiana House Commerce Committee, where he said that up to 25 percent
of the company's estimated 79,000 subscribers in Indianapolis are late with their
payments each month.
As a result, Time Warner must staff a collection department
with 11 full-time workers and a manager, said Time Warner spokeswoman Sherry
Hoffman-Meadows added that a Time Warner cost study
justified a decision to increase the local late fee by 25 cents per month, to $4.65.
"We're confident that our late fees reflect the
cost of collecting these accounts," Hoffman-Meadows said.
News of the lawsuit came just weeks after an unsuccessful
bid by a state lawmaker to introduce legislation that would have limited the late fees
that a cable operator could collect to the same amount that the state's regulated
utilities can charge, or 10 percent for the first $3 of an overdue bill and 3 percent for
each additional $1.
The bill died in the House Commerce Committee when chairman
James Bottorf decided against taking up the issue during a short legislature session
Time Warner is the third Indiana cable operator facing
legal action over late fees. Similar suits were filed against TCI in Martinsville, Ind.,
and against Comcast Corp.'s Comcast Cablevision in Indianapolis.