DIRECTV to pay $13.25 million for misleading ads

December 15, 2010 5:38:53 PM PST
Attorney General Roy Cooper's office announced Wednesday that North Carolina and 48 other states have reached an agreement with DIRECTV to reform its advertising practices after allegations it deceived customers.

"Luring people with misleading ads and then sticking them with extended contracts and hidden fees is no way to do business," Cooper said in a statement. "Consumers deserve straightforward information so they can make informed choices."

DIRECTV will pay $13.25 million to the states to settle the allegations, including $605,000 to North Carolina.

Cooper said he got complaints from North Carolina consumers who claimed DIRECTV did not disclose the full price they would pay or how long they’d have to sign up for satellite service to receive the promised price.

Other consumers reported that they were enrolled in extra contracts if they attempted to replace defective equipment and that sports packages they signed up for were automatically renewed each year, without their consent.

Consumers also complained that they were promised cash back for signing up but were instead given credits on their bills.

A total of 960 North Carolina consumers have complained about DIRECTV to Cooper’s office since 2007.

DIRECTV posted a statement about the settlement on its website:

"DIRECTV has worked hand-in-hand with the Attorneys General to formalize many of the customer improvements we have made over the past few years and are pleased to have come to this agreement," said Mike White, chairman, president and CEO of DIRECTV. "DIRECTV is committed to always operating with the highest standards of integrity and will move forward with continued dedication to providing the best video experience possible for our customers."

The company said the agreement formalizes many of the improved advertising, customer service, and third-party retailer policies and practices it has already implemented to better inform and serve its customers.

North Carolina consumers who have complaints about the terms contained in their contracts or problems with defective equipment and additional contracts, seasonal sports package renewals, and cash offers that occurred after January 1, 2007 may be eligible for a refund under the settlement if they have an unresolved complaint with Cooper’s office or DIRECTV.

Eligible consumers who have not yet filed a complaint are encouraged to do so by calling the Attorney General’s Consumer Protection Division at 1-877-5-NO-SCAM, or filling out a complaint form at www.ncdoj.gov .

To be eligible for a refund from this agreement, all complaints must be received no later than June 9, 2011.

The settlement requires DIRECTV to make a number of changes to its business practices, including:

  • Clearly disclosing all key terms to consumers.
  • Replacing leased equipment that is defective at no cost except shipping costs.
  • Not entering customers who replace defective equipment into an additional contract.
  • Clearly disclosing when a consumer is entering into a contract.
  • Clearly notifying consumers before they must pay for seasonal sports packages.
  • Clearly disclosing all limitations on the availability of local channels.
  • Not misrepresenting the availability of sports programming.
  • Not promising cash back if the consumer would actually get a bill credit.
  • Clearly notifying consumers that they will be charged a cancellation or equipment fee at least 10 days before charging the fee.

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