DIRECTV Sued for “Deceptively Advertising”

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The Federal Trade Commission (FTC) has lodged an official complaint against DIRECTV for deceptively advertising the cost of its satellite television service, something the company has long been accused of.

The nations largest provider of satellite television services, DIRECTV, has been deceptively advertising the price of a discounted 12-month TV package that fails to state it requires a two-year contract on sign up, resulting in an official federal complaint against the company. Additionally, DIRECTV does not disclose the cost of the package will continue to increase several dollars, up to at least $45 per month extra during its second year. Early cancellation of the service can rack up fees totaling up to $480, if you terminate the service before the two-year contract is up.

Meaning, if you don’t like the service you were falsely charged for, you can rack up an extra $500 bill to stop receiving the service and opt-out of the contract.

The company also failed to disclose their alleged “free premium channels for three months” is in fact not what it seems, instead, customers must proactively work to cancel automatic charges associated with the service.

“DIRECTV misled consumers about the cost of its satellite television services and cancellation fees,” FTC chairwomen Edith Ramirez said in a statement Wednesday, speaking on the complaint against DIRECTV. “DIRECTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed. 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’s deceptive advertising is not only a betrayal to their customers, but is also highly illegal. DIRECTV’s deceptive advertising could rack up bills on consumers credit and debit cards without their knowledge, charging loyal customers extra every month for services they may not even realize they are paying for.

Lodged in the official FTC complaint, the commission is looking to bar DIRECTV from engaging in alleged “illegal conduct,” or their deceptive advertising, as well as monetary compensation to affected customers.

El Segundo, California-based DIRECTV is the nations largest provider of satellite television services, with more than 20 million active subscribers spanning the United states. The company offers a variety of services, such as being the first to offer multi-channel video up to 4K resolution. DIRECTV offers packages consumers can subscribe to, typically offering a variety of services at a monthly price. The company typically requires users to lock themselves into a 24-month contract, which generally includes a program package, satellite dish, equipment, installs and support services.

With their latest offer they promised a discounted 12-month service with free premium channels, only one thing, the company forgot to mention they require users to lock themselves into these contracts, making DIRECTV one of many presumed providers that is deceptively advertising to customers.

This is not the first time DIRECTV has had a mix up with the FTC, since 2007 the FTC cites (PDF) that DIRECTV has violated the FTC Act by making “deceptive claims or omissions of material facts in advertisements and on its website,” regarding the television services.

In the FTC’s official complaint against DIRECTV’s deceptive advertising, FTC charges:

  1. DIRECTV promotes its television service and channel package prices “for 12 months,” with no regard to disclosing that such deals require consumers to lock themselves into a two-year contract, with a large one-time cancellation fee if customers are unhappy. It also slipped DIRECTV’s mind to add that the package price jumps from $25 to $45 a month in the second year of the contract. Woops!
  2. DIRECTV’s deceptive advertising also led consumers to believe they would receive several premium channels, such as HBO and Showtime “free for 3 months,” only this time, forgetting to disclose that: Consumers will automatically be enrolled in a continuous charge for premium channels once the not mentioned “trial period” ends; Consumers must contact DIRECTV directly before the trial period ends to avoid the continuous loop of charges; Alongside there are a number of “specific costs” associated with the incurring charges.

Meaning consumers who wish to end their alleged trial have to call up DIRECTV, where the average wait time can be 60 minutes to several hours, to then ask to cancel the service, where the sales reps will then continue to pester you, making sure you want cancel that service, offering upgrades with their service. Don’t take my word for it, a thread on Reddit reiterates the same thing, stating they must use a script and consumers within the thread are irate about their deceptive pricing plans.

While DIRECTV violated the FTC Act, the commission also alleges the company violated the Restore Online Shoppers’ Confidence Act (ROSCA) by failing to clearly disclose the recurring costs associated withe a number of services on their website.

The commissions complaint was approved 5-0, filing a suit with the U.S. District Court for the Northern District of California, San Francisco Division on March 11, 2015, naming the defendants as DIRECTV and DIRECTV, LLC.

Seeing as DIRECTV has been caught deceptively advertising to consumers, we can only hope to see more companies come clean or have a suit filed with the FTC. Another company Time Warner, has been caught doing the same thing, only no one had a federal complaint lodged against them.

Sources:
FTC.gov

Photo via Tariqmudallal/Wikimedia [CC BY 3.0]

About Author

Brandon Stosh is the founder and CEO of www.freedomhacker.net. Stosh is a cyber security researcher and professional consultant who strives to provide reliable news on cyber-security based topics.

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