FTC charges DirecTV with fraud for misleading customers

Lindsey Caldwell - Mar 11, 2015, 9:13 pm CDT
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FTC charges DirecTV with fraud for misleading customers

DirecTV has been charged by the Federal Trade Commission (FTC) for misleading customers. The advertising in question was DirecTV’s 12-month discount package. The plan was advertised as costing only $19.95, but obscured from customers was the fact that a 2-year contract was needed to get deal. Even more astounding is that the FTC alleges that DirecTV charged customers for premium channels after a 3-month trial period, and DirecTV never told customers that they needed to cancel these channels in order to avoid being charged automatically.

The FTC voted 5-0 to approve the official complaint against DirecTV. The FTC complaint was the first step in this legal matter of charging DirecTV. Now that they have been charged, the next step is for the judge to decide the case in the U.S. District Court in Northern California, San Francisco.

Getting down to the brass tacks of the matter, the price of this $19.95 package deal that DirecTV advertised increases to $45 per month in the second year of the necessary 2-year contract. Additionally, if a customer caught on and wanted to get out of the misleading contract, it would cost him $480 in cancellation fees. Additionally, DirecTV’s automatic charging for premium channels is just awful. If customers truly didn’t know that they needed to opt out, DirecTV was preying on their ignorance and the likelihood that customers would rather fork over a fee than deal with a long chain of customer service reps to cancel.

DirecTV is America’s largest satellite TV network and has over 20 million subscribers. Complicating the matter DirecTV is undergoing a $49 billion (yes, that’s billion, with a “B”) merger with AT&T. DirecTV is obviously refuting these charges by the FTC, but this is only the first step in what may be a long, ongoing ordeal.

For those readers who prefer their news set to video and music, check out CNN Money’s short headline video explaining the case.

Source: CNN Money


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