A proposed class action alleges RCN and a number of co-defendants have pulled in more than $30 million in “ill-gotten gains” by way of a bait-and-switch billing fraud scheme against more than 400,000 broadband internet, phone and cable television customers across six metropolitan areas.
According to the 37-page suit, RCN’s advertising, website and sales and service staff have misled consumers in New Jersey, Pennsylvania, New York, Massachusetts, Illinois and Washington D.C. by advertising broadband internet service for a flat monthly rate. Once a customer signs on with RCN, however, the company turns around and offers a higher monthly rate than the one promised and agreed upon, saddling the consumer with an undisclosed, made-up “network access and maintenance” fee, currently at $4.37, in addition to the monthly cost of service, the case claims.
The lawsuit, filed by consumers from Massachusetts and Pennsylvania, alleges the “network access and maintenance” fee charged by the below defendants is not, in fact, a bona fide cost but rather “completely made-up and fabricated”:
RCN Telecom Services, LLC;
Patriot Media Consulting, LLC;
RCN ISP, LLC;
RCN Management Corporation;
RCN Capital Corp;
RCN Telecom Services (Lehigh), LLC;
RCN Telecom Services of New York, L.P.;
RCN Telecom Services of Philadelphia, LLC;
RCN Telecom Services of Illinois, LLC; and
RCN Telecom Services of Massachusetts, LLC;
“RCN invented and utilizes the Fee to charge more per month for its service without having to advertise or notify its customers of the higher prices it is charging for the service,” the complaint says, estimating the defendants have collected roughly $1.75 million per month in “bogus fees.”
As the suit tells it, the first time RCN even mentions its “network access and maintenance” fee is on a customer’s billing statement, received only after they’ve signed up for and are committed to the service. Further, the lawsuit alleges RCN “deliberately hides and misrepresents” the fee by burying it in a bill’s “Taxes, Surcharges & Fees” section amid other purported taxes and government and third-party pass-through charges.
The effect of burying the “network access and maintenance” fee is to misleadingly convey to customers that the charge is an actual tax or other standard government or pass-through fee, the case says. In truth, the defendants’ “network access and maintenance” fee is “completely made-up” and used as a tool for RCN to advertise and promise lower rates than it actually charges, the complaint claims.
For those in search of an explanation, the fine print of a monthly RCN bill directs the customer to a page on the company’s website wherein RCN “explicitly and falsely states that the Network Access and maintenance fee is a ‘tax,’” the suit alleges. Likewise, those who contact RCN to complain about the fee are met with “outright lies,” and told it’s “a tax or government-related fee over which RCN has no control,” per the case.
In all, RCN invented the “network access and maintenance” fee as a covert way to bump up customers’ monthly billing amounts, the lawsuit claims. According to the suit, RCN first charged the fee in customers’ January 2018 bills and has systematically increased the charge every year.
“This scheme has enabled, and continues to enable, RCN to effectively increase its broadband internet rates without having to publicly announce those higher rates, and allows RCN to entice more customers by misrepresenting the costs customers would pay both in absolute terms and relative to other broadband internet providers in the industry,” the plaintiffs allege.
The lawsuit looks to cover all current and former RCN customers who, between January 1, 2018 and the present, were charged a “network access and maintenance fee.”
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