The Federal Trade Commission has charged DIRECTV, the largest provider of satellite television services in the US, with deceptively advertising a discounted 12-month programming package.
The FTC says the charges are due to the satellite operator’s failure to clearly disclose that the package requires a two-year contract. In addition, DIRECTV does not clearly disclose that the cost of the package will increase by up to $45 more per month in the second year, and that early cancellation fees of up to $480 apply if consumers cancel the package before the end of the two-year period.
DIRECTV is also accused of having failed to disclose that its offer of free premium channels for three months is in fact a negative option continuity plan that requires consumers to proactively cancel to avoid automatic charges on their credit or debit cards.
“DIRECTV misled consumers about the cost of its satellite television services and cancellation fees,” comments FTC Chairwoman Edith Ramirez. “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.”
In filing its complaint, the FTC is seeking a court order that permanently bars DIRECTV from engaging in the allegedly illegal conduct, as well as a monetary judgment that could be used to provide refunds to affected consumers.
With more than 20 million subscribers across the United States, DIRECTV is the largest provider of such multi-channel video programming distribution in the country.