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Comcast Faces $100M in Charges for Deceptive Promotions
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Comcast Corp. (CMCSA - Free Report) might face a hefty lawsuit fine of around $100 million in relation to its service protection plan. The Attorney General (AG) of Washington has sued the company on grounds of offering far less coverage on its $4.99-a-month service protection plan than advertised. As per AG’s view, the deceptive promotions breach the provisions of the state Consumer Protection Act on 1.8 million occasions.
As per AG, the service plan promises to deal with problems like fixing cables at homes and providing related services but has not revealed the constraints. Due to this, customers have ended up paying for repairs and technicians’ visits which were supposed to be covered by the plan. The deceitful advertisings have led nearly 500000 state residents to purchase the plan, amassing $73 million since Jan 2011. Comcast, on the other hand, has brushed off the allegations made by AG. The company has stated that it provides 99% coverage as advertised and has disclosed all exceptions on its website.
Larger Fine
While the AG’s office has levied a $100 million fine on Comcast, violations of the state Consumer Protection Act can inflict more damage on the company. Notably, as per current regulations, violating one of the terms of the Consumer Protection Act carries a $2000 penalty. Considering the alleged 1.8 million breach count, the penalty may scale up to $3.6 billion.
Price Performance
Year to date, the Zacks categorized U.S. Cable Television industry has registered growth of 17.91%. Meanwhile, Comcast’s 24.31% beats the industry mark. However, if the court decides against Comcast, it will inflict serious damage to its cash flow going forward. This is one of the main reasons why Comcast currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Also, Comcast competes with fellow pay-TV operators like Charter Communications Inc. (CHTR - Free Report) , DISH Networks Corp. and AT&T Inc. (T - Free Report) .
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Comcast Faces $100M in Charges for Deceptive Promotions
Comcast Corp. (CMCSA - Free Report) might face a hefty lawsuit fine of around $100 million in relation to its service protection plan. The Attorney General (AG) of Washington has sued the company on grounds of offering far less coverage on its $4.99-a-month service protection plan than advertised. As per AG’s view, the deceptive promotions breach the provisions of the state Consumer Protection Act on 1.8 million occasions.
As per AG, the service plan promises to deal with problems like fixing cables at homes and providing related services but has not revealed the constraints. Due to this, customers have ended up paying for repairs and technicians’ visits which were supposed to be covered by the plan. The deceitful advertisings have led nearly 500000 state residents to purchase the plan, amassing $73 million since Jan 2011. Comcast, on the other hand, has brushed off the allegations made by AG. The company has stated that it provides 99% coverage as advertised and has disclosed all exceptions on its website.
Larger Fine
While the AG’s office has levied a $100 million fine on Comcast, violations of the state Consumer Protection Act can inflict more damage on the company. Notably, as per current regulations, violating one of the terms of the Consumer Protection Act carries a $2000 penalty. Considering the alleged 1.8 million breach count, the penalty may scale up to $3.6 billion.
Price Performance
Year to date, the Zacks categorized U.S. Cable Television industry has registered growth of 17.91%. Meanwhile, Comcast’s 24.31% beats the industry mark. However, if the court decides against Comcast, it will inflict serious damage to its cash flow going forward. This is one of the main reasons why Comcast currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Also, Comcast competes with fellow pay-TV operators like Charter Communications Inc. (CHTR - Free Report) , DISH Networks Corp. and AT&T Inc. (T - Free Report) .
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>