Federal-Trade-Commission

For years, customers have complained quite loudly about the numerous hidden fees found on our cable and broadband bills. DirecTV, especially, has been a frequent target of customers wondering how or why a number of different fees were found on their monthly bills.

Now, the Federal Trade Commission (FTC) has asserted that DirecTV has been deceptively advertising satellite TV packages for as low as $19.99 a month for 12 months along with 3 months of free HBO and Showtime.

Customers who purchased this package quickly found out that they were being charged higher prices with a number of unauthorized charges.

As the FTC noted:

For example, DIRECTV touted that eye-catching $19.99 monthly rate for 12 months of service without clearly explaining that: 1) Consumers couldn’t actually sign up for 12 months of service because DIRECTV required them to commit to 24 months; and 2) In the second year, DIRECTV typically hiked up the monthly fee by between 50-70%. Consumers who experienced bill shock at the start of that second year and wanted to cancel faced hefty termination fees. – FTC

Then there was the “free for 3 months” offer for HBO and Showtime which didn’t explain to consumers that when the three-month period was over, the consumer was automatically charged full price for both services without the consumers consent to charge them for the service. We are talking close to $50 a month in new charges for the movie channels.

This isn’t even remotely the first time that DirecTV has battled with the federal government or individual states over deceptive advertising practices.

In 2010, Arizona Attorney General Terry Goddard, along with the attorneys general of 48 other states and the District of Columbia, settled an investigation involving DirecTV that paid refunds to consumers who had unresolved complaints. The states alleged that DirecTV engaged in deceptive and unfair sales practices. DirecTV agreed to alter its business practices in the future.

Some of the complaints included:

  • Did not clearly disclose to consumers the price the consumer would be charged and the commitment term the consumer would be required to keep DIRECTV services.
  • Did not clearly disclose to consumers limitations on getting a certain price for DIRECTV.
  • Enrolled consumers in additional contracts or contract terms without clearly disclosing the terms to the consumer.
  • Enrolled consumers in additional contracts when replacing defective equipment.
  • Did not clearly disclose to consumers that they would automatically renew a seasonal sports package.
  • Offered cash back to consumers when the consumer would actually receive bill credits.

I guess DirecTV forgot to alter those business practices.