FTC sues DirecTV, alleges hidden fees and deceptive ads
Mar 11, 2015 5:25 PM (ET)
By JENNIFER C. KERR
Associated Press
http://apnews.myway.com//article/20150311/us--ftc_sues_directv-0ab4260ed1.html
WASHINGTON (AP) — The government is taking the nation's biggest
satellite TV provider to court, accusing DirecTV of misleading millions
of consumers about the cost of its programming.
The Federal Trade Commission said Wednesday that its complaint charges
DirecTV Inc. with deceptively advertising a discounted 12-month
programming package. Consumers weren't clearly told that the package
requires a two-year contract, the commission said.
The advertising, the FTC said, did not make clear that the cost of the
package would increase by up to $45 more per month in the second year
and that hefty early cancellation fees — up to $480 — would apply. The
allegations of deceptive advertising date back to 2007 and cover more
recent marketing campaigns, such as one in late 2014 that offered the
company's subscription service on a limited basis for "only $19.99" a month.
"We require businesses to be truthful and to give consumers the
information they need to make informed choices about goods and
services," said Jessica Rich, head of the agency's consumer protection
bureau. "Companies can't hide important information from consumers to
trick them into buying goods and services — and that's what we allege
DirecTV did."
DirecTV denied the charges.
The company says it's made a number of improvements to make the ordering
process as clear as possible, eliminated some promotions that may have
been confusing to consumers, and prominently disclosed introductory
pricing terms.
DirecTV said many customers shop online, but the vast majority place
their order by phone. All the details about terms and conditions are
verbally communicated during the phone call and customers are asked to
acknowledge that they understand the terms, the company said.
The FTC's Rich said the commission would seek refunds for consumers. She
did not say exactly how many people were involved but said a large
portion of the company's more than 20 million U.S. subscribers were
affected.
The FTC also took issue with DirecTV's trial offers of premium channels,
such as HBO and Cinemax. Consumers weren't properly told that they would
incur significant monthly fees if they didn't cancel the trial offer
before the three months were up, the FTC said.
California-based DirecTV has been in trouble with the FTC before. The
company paid a $5.3 million settlement in 2005, and then a $2.3 million
settlement in 2009 — both over telemarketing calls to consumers.
The FTC complaint over DirecTV's marketing practices was filed in
federal court in San Francisco.
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