Charter Must Pay $19 Million For Tricking Customers Into Switching ISPs (arstechnica.com) 34
A judge has ordered Charter Communications to pay $19.2 million to Windstream for lying to customers in order to trick them into switching from Windstream to Charter's Spectrum Internet service. Charter also faces a $5,279 penalty for shutting off service to hundreds of Windstream's resale customers. Ars Technica reports: When Windstream filed for bankruptcy in early 2019, Charter began a "literally false and intentionally misleading advertising campaign intended to create the impression, using mailings designed to seem as if they were coming from the Debtors [Windstream], that the Debtors were going out of business," said an order issued Thursday by Judge Robert Drain of US Bankruptcy Court for the Southern District of New York. Charter's goal with the mailings "was to induce the Debtors' customers to terminate their contracts and switch to Charter by sending them literally false and intentionally misleading information about the Debtors' bankruptcy cases and financial wherewithal," the ruling said. Charter premised its ad campaign "on false assertions regarding the Debtors' bankruptcy cases," the ruling said.
"We are gratified that Judge Drain's ruling means Charter will have to pay a significant price for its egregious false advertising," Windstream General Counsel Kristi Moody said, according to a FierceTelecom article. "Charter knew full well what it was doing when it embarked on a dishonest scare-tactic campaign to lure away our customers. At Windstream, we will always aggressively defend ourselves and our customers against predatory schemes and meritless allegations."
"We are gratified that Judge Drain's ruling means Charter will have to pay a significant price for its egregious false advertising," Windstream General Counsel Kristi Moody said, according to a FierceTelecom article. "Charter knew full well what it was doing when it embarked on a dishonest scare-tactic campaign to lure away our customers. At Windstream, we will always aggressively defend ourselves and our customers against predatory schemes and meritless allegations."
We need to hire economists (Score:4, Insightful)
Maybe. (Score:2)
You don't need an economist. Just make it a percentage - maybe one tied to the tax rate they're supposed to actually pay vs the ones they do.
Re: (Score:2)
Nothing will happen in reality until someone is imprisoned. Those fees imposed are already in the "risk bucket" that they can afford.
Re: (Score:1)
Fines should be a percent of revenues. Not profits, revenues. They brought money into their company via fraud; how they spent that money is irrelevant. Fines should always be a percent of revenues. End of.
Re: (Score:2)
Just make it a percentage
That percentage must be greater than 100% of the profit that they will make because of this over a 10 year period. Anything less then it is just a cost of doing business.
Also: those in charge at Charter who decided to lie for what is, ultimately, their own personal gain MUST make a personal loss. They should be fined 5 times their pre tax income. If they do not feel the pain they will just repeat their dishonesty.
Re: (Score:2)
Re: (Score:2)
Re:We need to hire economists (Score:4, Informative)
We need to hire economists to calculate if the fine is less than the profits made and increase the fine if it is not. Otherwise fines are worthless.
$19.2 million fine for the loss of 1,386 customers per Windstream's court filing [courtlistener.com]. That's a fine of $13,852.81 per lost customer.
No way Spectrum's profit per acquired Windstream customer over the past 2 years was that much -- Spectrum started sending out the misleading mailings almost immediately following Windstream's bankruptcy filing in February 2019.
Re: (Score:2)
But unless they all go back now, the damage is ongoing.
Re: (Score:1)
This is just straight fraud. (Score:5, Insightful)
Once, just once, I would like to see one of these stories where it's not just some financial settlement, but where people in the company are facing criminal charges for their roles in it. This was fraud on thousands of people. It's a criminal act, and it should be treated as a criminal act. That's not to say that there should not also be civil suits of course. This whole "piercing the corporate veil" nonsense should only be needed to sue individuals, not to prosecute them for criminal acts.
Of course, it can be argued that the people actually performing the criminal acts have to or they would be fired. This is the classic "just following orders" argument. It's just more nonsense. It they committed crimes, prosecute them. If they were "just following orders" then let them turn over on their bosses for reduced sentences. If they do get fired for refusing to commit crimes, let them sue, and not just to get their jobs back, for large damages. Or, if they get prosecuted for committing crimes that they were coerced into, once again let them sue up the chain for large damages.
The frustrating thing is that the corporate veil is just a fiction. If a tiny ISP, incorporated just the same as Charter, tried to fraudulently take a bunch of customers from Charter, it seems almost guaranteed that they would face criminal charges. Basically, there's one set of rules for the big guys and another set for the little guys (not that I'm any more fond of small-time fraudsters).
Just once? How about 1,000/month (Score:3)
People are charged and convicted all the darn time, by various federal and state agencies. For example, in 2020 the fraud section of the US attorneys office charged 326 people, leading to 213 convictions. Then you have the SEC, the IRS, etc. Because of the investigatory powers of the IRS, it's often convenient to bust bad guys for tax fraud, after they get law enforcement attention by doing something else (bad guys tend to cheat in their taxes).
In total, the federal government alone prosecutes about 400 whi
Re: (Score:2)
I was not claiming that fraud is never prosecuted. I was saying that the fraud in this particular article is criminal and should be prosecuted as such, but it won't because it's a big company doing it. If you actually look at the link you provided, they have a long list of types of fraud that are prosecuted. On that list, this might fall under consumer fraud. You very seldom see criminal convictions when large companies do this. Even when you do see criminal trials against large companies for fraud, usually
Re: (Score:2)
That is fine at the executive level, but not really for low level employees. Sure, if it's an obviously illegal order like "kill that person and bury the body in the desert" then yes. But if it's "send out these letters". then no. Most people can't afford to hire a lawyer to check every time their boss tells them to do something (certainly they're not paid enough to do that), and they often assume a team of company lawyers has already looked it over (they might be wrong, but it's a common enough assumption)
Re: (Score:2)
I think, generally speaking, anyone dumping wastewater in a stream is going to have a pretty good idea if it's a crime or not. Usually those instructions come with additions like "do it at midnight" or "make sure no-one sees you do it" or instructions to mislabel the containers, etc.
Anyway, in those cases, the low-level employees can get immunity from prosecution for testifying against whoever told them to do it. They can work up the chain to whoever is ultimately responsible. That's fine. Just pretending t
Re: (Score:2)
The person actually dumping the waste "water" probably has no actual idea what's in it. They probably don't get sinister sounding instructions like do it at midnight. Instead, someone working 3rd shift gets the order and told to do it early in their shift. It'll be just one of many things they are supposed to do that shift (move 5 drums of XYZ from storage to the staging area, put a fresh coat of zep on the floor over here, straiten that stack of boxes before something falls, unload that truck, etc) They ma
Re: (Score:2)
Sure, just like the employee who is told to change the expiration date on the expiring products has no actual idea that they're not supposed to do that. I mean, realistically, there are employees dumb enough or poorly informed enough to just follow those orders. Anyone who thinks it's just routine to dump drums of waste into a river at the start of 3rd shift (i.e. midnight) has some issues. I think you could argue that anyone who does not know if something is treated waste approved to dump into a waterway o
Re: (Score:2)
I agree with not buying in to "ignorance of the law is no excuse". Sure, we all know murder and robbery are illegal, but there's a zillion other laws that even people who have devoted their professional lives to the practice must look up. Since we can't ALL devote our professional lives to knowing the law and since even that wouldn't be enough, I have to say the legal principle needs to be retired. When that was coined, the legal code was a LOT smaller.
Also agreed on strict liability. I note that the courts
Re: (Score:2)
But I think we are agreed that the one we really want to prosecute is the person up the chain who knowingly made a decision to break the law.
Sure, they're the one that we want to prosecute. What actually ends up happening though, is that the low level employee who ended up committing the crime is not inclined to turn in their boss when their only skin in the game is whether or not they keep their job.
Re: (Score:2)
The solution will be making the action not a net negative for the low level employees. Or at least not letting the consequences be too great.
No amount of whipping will get a man to jump into a running tree chipper.
Re: (Score:2)
I can't really disagree there. I just see the way to do that as a combination of reducing the power of the employer over the employee and increasing the pressure a prosecutor can exert over the employee. So that, rather than jumping into a wood chipper, they would be avoiding the woodchipper.
There should be something for Time Warner (Score:2)
Because as barely adequate as Time Warner was, "Rectum umm I mean Spectrum" has so far been pretty bad.
Re: (Score:2)
From what I hear Windstream is just as bad, if not worse. Having these two as choices for ISP is like having to choose between two turd sandwiches.
Re: (Score:1)
Useless (Score:2)
We need criminal charges (Score:5, Insightful)
::SMACK:: (Score:2)
Really, they need to be body slammed with a giant fine 10 times the amount they were given.
What the actual fuck did they get gacked up on to even think of pulling something like this?
BAD DOG! BAD! It's the cheap, dry, smelly food for you for the next month!
Not enough (Score:2)
If the fine is at or below an acceptable cost of doing business, it neither helps those injured nor hurts those who injure nor discourages anyone else.
Charter should pay a fine commensurate with both direct and indirect damage suffered by all parties concerned, and the damage limitation to cap fines should be changed to reflect net damage and not what the perp can afford out of their pocket money.
literally knew better (Score:1)
"Charter itself filed for bankruptcy in 2009 and then sued DirecTV "for 'false' advertising that it said could give customers the impression Charter is liquidating and that its cable TV services will soon end," as Reuters reported at the time."
Mild Slap on the Wrist at Best (Score:2)
Let's see, a $19M fine for a company with revenues of $43B a year would be the equivalent of fining the average American $15--hardly a deterrent.
Re: Mild Slap on the Wrist at Best (Score:2)
Strangely, fraud seems to be a serious crime. Not a jaywalking ticket, but an actual crime where people get put in a place with metal bars everywhere, and you are made to bunk with a guy named "Bubba".