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U.S. Senators Say Time Warner Cable Overbilled Customers $640,000

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U.S. Senators Say Time Warner Cable Overbilled Customers $640,000

In a recent staff report, U.S. Senators said Time Warner Cable, which was bought by Charter Communications, Inc. - Class A (NASDAQ: CHTR) for $79 billion, overbilled customers nationwide an estimated $639,948 between January and April 2016, and the number is expected to touch $1.91 million in 2016.

In a Senate hearing held by Sen. Rob Portman (R-Ohio) and Sen. Claire McCaskill (D-Mo.), the investigation revealed Charter overbilled customers by at least $442,691 per month.

The Senate report said, "Time Warner Cable and Charter made no effort to trace equipment overcharges to their origin unless customers specifically asked them to and did not provide notice or refunds to customers."

Related Link: Take Advantage Of Trading Choppiness In Charter; Wunderlich Maintains Buy, Raises Target

Significant Numbers Across The Board

On the other hand, the report noted that rivals Comcast Corporation (NASDAQ: CMCSA) and DirecTV provide automatic refunds or credits to overcharged customers, while DISH Network Corp (NASDAQ: DISH)'s billing system attempts to completely prevent these types of overcharges.

Meanwhile, the report also looked into overbilling in the senators' own states. Time Warner Cable estimates that, in 2015, it overbilled 40,193 Ohio customers a total of $430,393 and 4,232 Missouri customers a total of $44,152.

"Time Warner Cable also told the Subcommittee that, during the first five months of 2016, it overbilled customers in Ohio for 11,049 pieces of equipment, totaling $108,221," according to the official Senate document.

Charter, which doesn't offer its service in Ohio, expects it has annually overcharged about 5,900 Missouri customers a total of $494,000 each year.

Going Forward

Following this investigation, Time Warner Cable will provide an automatic one-month credit to overcharged customers.

However, Time Warner Cable will not look into when it began overcharging customers unless notified by customers, nor will it provide a full refund dating back to when the overcharge began.

Similarly, Charter will provide customers with a one-year credit for any equipment overcharges. Charter has also implemented systemic controls, which the company says will prevent equipment overcharges in the future.

At time of writing, Charter Communications was down 2.77 percent on the day at $218.64.

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