New York, NY: Time Warner is facing two consumer fraud class action lawsuits over modem “lease” fees, and the way in which the company announced the new fees. As many as 15 million customers could be affected by the lawsuits.
In papers filed in New York and New Jersey courts, customers contend that the $3.95 fee is illegal because it’s not included in existing customer agreements, the company did not give mandatory 30-day notice and it notified customers with a “paltry postcard.”
Furthermore, while Time Warner told its customers that they could buy their own modems, it stipulated that customers could only use approved devices - all of which are the more expensive Motorola models.
“It’s just a scam to increase revenue,” said Steven Wittels, one of the lawyers representing the plaintiffs. The fee took effect October 15, and is projected to raise $40 million a month and more than $500 million a year in revenue for Time Warner, which is currently valued at around $19.7 billion. Time Warner contends it was going to use the funds to improve its infrastructure and service.
The suits were brought on behalf of Manhattan resident Kathleen McNally and Fort Lee resident Natalie Lenett as well as all customers in the 29 states where Time Warner operates.