In a statement issued Monday, Comcast said it was suspending its streaming and video services, including YouTube and Netflix.
“We have been informed that we have been found liable by a class action lawsuit filed in federal court in New York City.
The company is fully cooperating with the investigation and has no further comment at this time,” Comcast said.
“The lawsuit alleges that Comcast failed to prevent consumers from accessing its website, failed to protect customers from identity theft, failed in its obligations under the Electronic Communications Privacy Act (ECPA), and failed to maintain customer data to ensure the safety of its customers.”
It also alleged that Comcast did not act to protect consumers’ privacy, did not keep customer data safe, and failed in duty of care.
Comcast, which is the nation’s largest cable provider, is a division of Time Warner Cable, which has its own cable service.
The complaint said the company was unable to offer refunds for any customers who paid more than $50 a month for its streaming services.
It said the court found that Comcast and its cable subsidiary, Time Warner, were negligent in failing to prevent the sale of unauthorized products to consumers.
“Comcast is pleased to have reached a settlement with a class of customers,” the company said in a statement.
“As part of the settlement, Comcast will pay $300,000 in restitution to consumers who purchased unauthorized products on its online streaming service, and Comcast will reimburse consumers for all purchases made in connection with those unauthorized purchases.”
Comcast has been sued for violating the ECPA more than once in recent years.
The lawsuit, which was filed by the National Consumers League, said the settlement provides “for a total of $1.5 billion, and more than half of that amount will be paid by Comcast to consumers.”
It said that, as part of a class-action settlement, consumers who were harmed by unauthorized product purchases will also receive refunds.
“While the ECPSA is not yet finalized, the ECPUL will ensure that consumers who paid a subscription fee for unauthorized products will be compensated,” the group said.
The National Consumers Alliance is a nonprofit advocacy group representing consumers, and it is a part of Americans for Limited Government, a conservative advocacy group that opposes the Obama administration’s climate change policies.
“They have taken this action in order to avoid paying any additional restitution, which they hope will be a permanent settlement,” said Jim Caruso, the group’s executive director.
“What they’ve done is to avoid taking any action at all to help consumers,” Carusos said.
A number of states have passed laws that make it illegal for cable companies to sell products they don’t own or rent out.
“This settlement will make it harder for cable and satellite companies to charge consumers money for illegally downloading illegally downloaded content,” said Mark S. Greenstein, a senior fellow at the Cato Institute.
“It will prevent cable companies from offering ‘rent-a-play’ services like this.”
In August, the Department of Justice launched a civil rights investigation into Comcast, charging it with failing to protect its customers from fraudulent advertising.
The Justice Department said Comcast failed in that investigation, but it was not clear whether it was pursuing any legal action.
“These actions by the DOJ are designed to stop companies from continuing to abuse the Internet and its millions of subscribers and customers,” Attorney General Loretta Lynch said in October.
The DOJ said it would review Comcast’s offer of a refund for customers who have paid more money than they paid.
“Customers will receive a refund of any unused amounts paid during their initial billing cycle, as well as any amounts they owe over time,” a Comcast spokeswoman said.