F.T.C. Files Lawsuit Against DirecTV over Deceptive Advertising

FTC Lawsuit Against DirecTV Says Company Misled Customers

FTC Lawsuit Against DirecTV Says Company Misled Customers

A lawsuit filed by the Federal Trade Commission (FTC) alleges that DirecTV misled customers about the price of a two-year service promotion. DirecTV is the largest satellite television provider in the country with over 20 million subscribers. According to the New York Times, an agency spokesman says that the issue affects a “substantial portion” of DirecTV customers. The FTC is looking to get millions of dollars in refunds, said Jessica L. Rich, director of the agency’s bureau of consumer protection.

The FTC alleges that DirecTV marketed the deal as a one-year subscription starting at $19.99 a month, when in reality the promotion required a two-year contract with increasingly high monthly costs and an expensive cancellation fee. “DirecTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed,” said FTC Chairwoman Edith Ramirez, in a statement. “It’s a bedrock principle that the key terms of an offer to a consumer must be clear and conspicuous, not hidden in fine print.” DirecTV denies the allegations.

“The company tells consumers to ditch cable and switch to satellite TV to save money,” said Ms. Rich, according to NYT. “DirecTV hid important terms in order to trick consumers into buying its satellite TV packages.”

The suit was filed in the U.S. District Court for the North District of California. The FTC alleges in the complaint that DirecTV has engaged in deceptive advertising since 2007. The satellite provider also did not clarify that the price per month could increase by up to $45 and that a $480 fee would apply if customers wanted to cancel before the full two years expired, the agency alleged. Furthermore, the FTC alleged that DirecTV told customers they would have access to premium channels, such as HBO and Showtime, for the first three months without informing them that they had to cancel in the appropriate time to avoid being charged.

This is not the first time the FTC has taken legal action against DirecTV. NYT reports that in 2005 and 2009, the company paid two settlements totaling $7.6 million for telemarketing violations.

“You deserve to know exactly what you’re going to pay down the line before you get your first bill,” said Delara Derakhshani, policy counsel for Consumers Union, a public policy and advocacy division of Consumer Reports, according to NYT. “Too often, consumers are told one price, only to find unexpected fees and rate hikes.”

Read more at: http://www.yourlawyer.com/practice-areas/product_liability

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