Comcast Corporation (NASDAQ:CMCSA) is being hit with the biggest cable fine ever levied by the Federal Communications Commission after charging customers for products and services they never ordered. Not that you’d know it by looking at CMCSA stock.
Giving customers something they never asked for seems to be in fashion these days. Wells Fargo & Co (NYSE:WFC) is embroiled in a scandal after it came to light that thousands of its bankers gave customers accounts they didn’t ask for or even know about.
But at least WFC’s shenanigans didn’t cost customers a dime. That can’t be said of Comcast. The FCC received thousands of complaints over the years about CMCSA charging them for premium channels, cable boxes, DVRs and other offerings they never ordered. Travis LeBlanc, chief of the FCC’s Enforcement Bureau, said in a statement:
“It is basic that a cable bill should include charges only for services and equipment ordered by the customer — nothing more and nothing less.”
CMCSA Sails On
It’s kind of amazing that the FCC statement needs to be spelled out in the first place. It’s also eyebrow-raising that Comcast has to submit to a five-year compliance program.
You know, as if it were on parole.
However, the most surprising part is that the fine — the largest ever slapped on a cable company — comes to a paltry $2.3 million. That’s chump change for a company that had $75 billion in annual revenue last year.
True, the scope of the fraud was tiny compared to Wells Fargo, but CMCSA still got off easy. Shares were virtually unaffected by the news. WFC stock is off about 10% since its indiscretions came to light in early September. That equates to about $15 billion in lost market value for shareholders.
WFC also took a huge hit to its previously squeaky clean reputation. Comcast didn’t have such a reputation to lose. No one likes their cable company.
So what does this mean for anyone holding CMCSA stock?
Not much. They — as well as Comcast itself — got off easy.
As of this writing, Dan Burrows did not hold a position in any of the aforementioned securities.