Home » Cable One »Consumer News »Public Policy & Gov't » Currently Reading:

Cable One: Your Price and Customer Service Depend on Your Credit Worthiness

Phillip Dampier June 29, 2016 Cable One, Consumer News, Public Policy & Gov't 1 Comment

no-thanksFirst credit cards were tied to your credit score, then auto insurance, and now how much you pay for cable television and what kind of support you receive from customer service may also depend on your creditworthiness, at least at Cable One.

CEO Thomas Might ignited controversy over his remarks at a recent J.P. Morgan Global Technology, Media and Telecom Conference when he told Wall Street analysts the company was working hard to reduce the “hollow profitability” of its cable TV business. Fierce Cable caught the transcript. One of the biggest reasons to blame for low profits may be Cable One’s deadbeat customers who don’t pay their bills. Starting in 2013, Might ordered a “very rigorous FICI credit scoring process” on all video customers to weed out the good from the bad.

Might suggested Cable One discovered those with low credit scores were among the company’s low value customers, and they deserve much less from the cable company in return.

“We don’t turn people away,” Might said, but the cable company’s technicians aren’t going to “spend 15 minutes setting up an iPhone app” for a customer who has a low FICO score. “What we found is that through lifestyle and billing analysis, we could start to pinpoint where churn and bad debt was coming from, and credit scoring started to be a really good test.”

cable oneCable One has even stopped direct marketing its cable service, even though it was winning nine percent of new customer sign-ups. The customers Cable One attracted were so low quality, Might claims the company didn’t make a penny from the marketing effort.

“It was the worst of the lifetime value segments we had,” Might said.

Cable One’s unwelcome credit challenged customers returned the favor and canceled their service in droves. Although bad debt is down 70 percent under the new credit check policy, Cable One has lost about half of their cable TV customers, most leaving for AT&T U-verse or satellite television.

Might

Might

Might’s intemperate remarks evidently triggered the company’s recent decision to contact the FCC to “clarify” the situation. Chief operating officer Julie Laulis tried to quell any controversy Cable One treats its customers differently based on how they handle their credit.

“Cable One runs a consumer credit pre-qualification, with the applicant’s consent, solely during the new customer sign-up process,” Laulis said. “The pre-qualification results are used to determine the size of the deposit and the installation charge, if any, that would be appropriate for the particular customer to offset the customer to offset the non-payment of bills or the non-return of equipment, as well as any introductory offers the customer may be eligible to receive.”

But once signed up, Laulis admitted the company still treats customers differently based on an internal scoring system it calls Lifetime Value (LTV), which determines what perks and special deals each customer is qualified to receive.

“Importantly, the LTV program has nothing at all to do with the use of credit scores,” Laulis added. “Any Cable One customer can, through a good payment history, achieve the highest LTV level and achieve additional levels of customer service and other benefits. This LTV level is independent of a credit score, and a credit score is not used to determine levels of service or loyalty rewards.”

Laulis claimed “the media” confused Might’s positions on credit scoring inside Cable One, although the cable company never asked for any corrections. Laulis also doesn’t deny the amount of customer service assistance available to customers may still depend on their creditworthiness.

0 0 votes
Article Rating
1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Really
Really
5 years ago

Ok so this is what they do now. If you’re already rich, they reward you by kissing your feet every time you step in the bath tub but if you honestly could use a little extra help in life you not only get less than equal treatment but you are also punished for not being a CEO at some law firm? See there is a difference between actually paying for extra services and price gouging and this kind of treatment is just price gouging using a loophole only instead of charging more for nothing extra it’s just refusal of service… Read more »

Search This Site:

Contributions:

Recent Comments:

Your Account:

Stop the Cap!