Subscribe

DirecTV tricked customers into expensive packages, feds say

DirecTV has been tricking customers into buying satellite television packages that are more expensive than they appear, the Federal Trade Commission claims in a complaint filed against the company on Wednesday. DirecTV aggressively disputes the government’s claims.

  • close
    A DirecTV satellite dish is attached to a roof at a home in Palo Alto, Calif. 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.
    Paul Sakuma/AP/File
    View Caption
  • About video ads
    View Caption
of

Could its next commercial feature Charged-You-Hundreds-More-Dollars-Than-You-Expected Rob Lowe?

DirecTV has been tricking customers into buying satellite television packages that are more expensive than they appear, the Federal Trade Commission claims in a complaint filed against the company on Wednesday.

Filed in federal court in California, the complaint says DirecTV, the nation’s largest satellite TV provider, deceptively advertised a 12-month package that, in fact, required a  two-year contract, with the second year coming with a considerably higher price tag.

“DirecTV misled consumers about the cost of its satellite television services and cancellation fees,” FTC Chairwoman Edith Ramirez said in a news release. “DirecTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed.”

DirecTV aggressively disputes the government’s claims.

“The FTC’s decision is flat-out wrong, and we will vigorously defend ourselves, for as long as it takes,” a spokesperson said in an email to NerdWallet. “We go above and beyond to ensure that every new customer receives all the information they need, multiple times, to make informed and intelligent decisions. For us to do anything less just doesn’t make sense.”

According to the FTC, a 12-month discounted plan advertised by DirecTV actually requires a contract for twice that long. In the contract’s second year, its price increases by up to $45 per month, and there is a $480 early-cancellation fee if the customer tries to get out of the deal before the two years are up.

The commission says the company focuses on the first 12 months in its promotions without “clearly and prominently” disclosing the other aspects of the deal.

“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,” Ramirez said.

The FTC also cited DirecTV for promotions that offer premium channels like HBO and Showtime “free for 3 months” without clearly disclosing that consumers will start being charged for those channels after the trial period is up if they don’t contact DirecTV and cancel them.

The commission is seeking a court order that bars DirecTV from continuing what it calls illegal conduct and a monetary judgement that could be used to pay back affected customers.

Based in El Segundo, California, DirecTV has more than 20 million subscribers nationwide.

Doug Gross is a staff writer covering personal finance for NerdWallet. Follow him on Twitter@doug_gross and on Google+.

The Christian Science Monitor has assembled a diverse group of the best personal finance bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link in the blog description box above.

About these ads
Sponsored Content by LockerDome
 
 
Make a Difference
Inspired? Here are some ways to make a difference on this issue.
FREE Newsletters
Get the Monitor stories you care about delivered to your inbox.
 

We want to hear, did we miss an angle we should have covered? Should we come back to this topic? Or just give us a rating for this story. We want to hear from you.

Loading...

Loading...

Loading...

Save for later

Save
Cancel

Saved ( of items)

This item has been saved to read later from any device.
Access saved items through your user name at the top of the page.

View Saved Items

OK

Failed to save

You reached the limit of 20 saved items.
Please visit following link to manage you saved items.

View Saved Items

OK

Failed to save

You have already saved this item.

View Saved Items

OK