Have you seen DirecTV commercials and advertisements promising discounted rates for 12 months? Those deals might be too good to be true. The FTC is alleging that they are loaded with all sorts of fine print, and you could end up paying a lot more than you bargained for. Now, the agency is suing the company to stop the ads and get some money back for consumers.
If you sign up for one of those discounts, you will get a discounted rate for the first year. The problem is, the deal requires you to sign up for a 2-year contract, meaning you'd have to pay the full price for the last 12 months. If a customer decides to cancel the plan early, they'll have to pay a $480 cancellation fee. The FTC alleges that DirecTV isn't open with customers about those last two details.
"DirecTV misled consumers about the cost of its satellite television services and cancellation fees," said FTC Chairwoman Edith Ramirez in a statement. "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."
The FTC also alleges that DirecTV unfairly charges some customers for premium channels. Customers get several premium channels for free for three months with a two-year contract. However, customers must cancel the channels before the three months is up or they will automatically be charged for the content going forward.
The complaint was filed in U.S. District Court for the Northern District of California, and the FTC is seeking to stop DirecTV from airing anymore of these ads. It also would like to force DirecTV to give refunds to some customers.
DirecTV disagrees with the FTC's allegations. The company says it has always been open with customers about the specific details of its discounts and deals.
DirecTV, which is the largest satellite TV provider in the U.S. with 20.35 million subscribers, called the FTC's charges "flat-out wrong," in a statement. "We will vigorously defend ourselves, for as long as it takes. 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."
Are you a DirecTV customer? I'll keep an eye on this story and let you know how to claim your refund if the court decides in the FTC's favor.