Charter Fined $19 Million For Tricking Customers

By Andrei Ene

Posted on April 15, 2021

Cable Giant Charter Communications has been hit with a $19.2 million fine for launching an advertising campaign that targeted Windstream customers, in which the company tried to convince them that they would lose internet and TV services as Windstream was reorganizing during that period.

A judge found Charter guilty of lying with the ulterior motive

The company had no palpable defense against allegations of lying and trying to persuade Windstream customers to instead switch to Charter’s Spectrum Internet service. And not just that, but the company even copied Windstream’s color scheme in their advertising campaign.

Windstream did indeed file for bankruptcy at the beginning of 2019, which was when, according to the order issued Thursday by Judge Robert Drain of US Bankruptcy Court for the Southern District of New York, Charter started the “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.” The complaint filed by Windstream as part of its proceedings in the US Bankruptcy Court in NY’s Southern District claimed that Charter had mailed Windstream customers and implied that the company was no longer able to provide service due to its bankruptcy.

The Charter mailing came in envelopes labeled “Important Information Enclosed for Windstream Customers”

“Windstream Customers,
Don’t Risk Losing Your Internet and TV Services.

Windstream has filed for Chapter 11 bankruptcy, which means uncertainty. Will they be able to provide the Internet and TV services you rely on in the future? To ensure you are not left without vital Internet and TV services, switch to Spectrum. With a network built for the future, Spectrum is here for the long haul.”

Windstream is one of the largest SD-WAN service providers in the US. In 2020, the company has completed a fiber transport network expansion from Salt Lake City to Portland but also expanded a Kinetic gigabit internet service to an additional 600.000 locations. According to the court filing. Windstream estimated that over 1.000 customers “canceled their Windstream subscription services as a result of Charter’s false advertising.”
This was a sample of what came inside the envelope!

And as a result, Judge Robert Drain stated in the Thursday decision that “no reasonable person would believe that Defendants’ advertising campaign, designed to use false and knowingly misleading information to cause the Debtors’ customers to terminate their contracts and switch to Charter, protected a legitimate interest of Charter’s and did not harm property interests of the Debtors.”