Time Warner Cable Modem Lease Fee Class Action Lawsuits

Sarah Mirando | November 15, 2012

Category: Legal News

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By Kimberly Mirando

Angry Time Warner Cable customers have slapped the company with two class action lawsuits over a new fee it snuck into its contract that charges customers for leasing used modems.

The Time Warner modem fee class action lawsuits were filed by Kathleen McNally of Manhattan and New Jersey resident Natalie Lenett. Both plaintiffs are asking the court to order refunds for all Time Warner Cable customers charged the new modem fees in violation of consumer fraud laws.

“Prior to October 15th, the company provided customers with Internet modems included as part of their monthly service plans,” McNally says in her Time Warner class action lawsuit. “Now, however, TWC is charging millions of customers an extra $3.95 per month for the privilege of ‘leasing’ old modems — used pieces of equipment that the company supplied and typically wrote off as worthless years ago.”

McNally says the new Time Warner Cable modem lease fee adds up to “a virtually guaranteed $40+ million cash flow per month” at the expense of loyal customers.

“It’s a massive hi-tech consumer fraud accomplished by low-tech methods,” attorney Steven L. Wittels said. “Send customers confusing notice of the fee in a junk mail postcard they’ll throw in the garbage, sock them with a $500 million dollar a year rate hike, then announce on your website that customer satisfaction is your #1 priority. That’s some way to deliver satisfaction.”

According to McNally’s class action lawsuit, the lease fee constitutes “massive consumer fraud and breach of contract,” and violates Time Warner’s “code of professional business conduct,” which instructs its employees to ask themselves three questions when making a business decision: “Does it feel right? How would the person I respect the most view this decision? How would this look in a newspaper?”

McNally answers these questions for them in the class action lawsuit: “No, the surprise new Lease Fee doesn’t feel right; the people you respect would call it a scam; and it will look terrible once the media gets hold of the story. Yes, it’s the same old story once again, a corporate behemoth putting profits over people by way of some sneaky fee.”

The Time Warner modem lease fee class action lawsuits are seeking to represent all Time Warner Cable customers who now have to pay for the new modem lease fee. They’re asking for an injunction to stop Time Warner from imposing the fee in 28 states in addition to damages for alleged breach of contract, consumer fraud, unjust enrichment, and more.