Thousands of Century Cable subscribers in Los Angeles County will receive rebates as reimbursement for allegedly exorbitant late fees, authorities said Wednesday.
Century also agreed to pay more than $200,000 in fines to local governments under a settlement stemming from allegations the firm charged 10 times the costs it incurred in processing late fees.
Century admitted no liability in agreeing to pay the fines and provide the $3.99 coupons good for one free pay-per-view event, according to a spokesman.
Asked how many customers will receive the rebates and when, Joseph DiBacco, southwest divisional manager for Century Cable, said he believed it was a very small percentage but could not provide exact numbers, as it was late in the day.
The coupons are designed to reimburse selected customers who were charged $10.50 in late fees between 1992 and 1996. According to prosecutors, the alleged overcharges continued through Dec. 31, 1996--the day before a new state law went into effect prohibiting charges over $4.74.
The higher fees allowed Century to collect $1.6 million more in revenues than the late payments cost the firm, prosecutors said.
"Under the law, you are only allowed to collect what covers expenses due to late payment," said Deputy Dist. Atty. Lisa Kaas Boyle of the county's Consumer Protection Division. "They were claiming they were undercharging. Our expert determined most of their late fees were pure profit."
DiBacco said the company presented documents from an independent accounting firm showing the expense of collecting late fees was greater than the amount it had actually collected.
"We're glad to get this matter resolved," DiBacco said. "Both parties clearly understood it was better to settle the matter rather than spend more money to fight it out in the courts."
Century Cable serves 100,000 residences in parts of the Westside, Hollywood and the San Gabriel Valley and another 60,000 residences south of Ventura Boulevard in the San Fernando Valley.
In the civil settlement, approved Tuesday by Superior Court Judge Reginald Dunn, Century Cable avoided a protracted and expensive legal fight--as well as any culpability--when the company agreed to pay $171,418 in civil penalties and $38,000 in legal costs.
"Cable franchises are granted a special power by the city and county," Kaas-Boyle said.
"They are insulated from competitive pressures, in essence operating as monopolies within their franchise areas. Their imposition of excessive fees is breach of the public trust because of their special position and the associated consumer dependence."