DirecTV agrees to settle charges of misleading advertising
DirecTV has resolved charges of misleading advertising and has agreed to pay state governments $13.25 million in addition to reimbursing customers who file claims.
Wednesday's settlement ended complaints brought by attorneys general in all 50 states, including California. State officials alleged that the satellite television giant, based in El Segundo, enticed customers to sign up for service by offering deals without fully explaining the costs of the contract.
People also were promised programming, including local channels and sports networks, that they did not receive, according to the claims of state officials. DirecTV also allegedly extended contracts without the knowledge of customers.
Among the complaints against DirecTV was a promotional deal to receive the service for $29.99 a month when the typical charge for service was $53.99 or $63.99 a month. California Atty. Gen. Jerry Brown, who becomes governor of the state next month, contended that the company did not adequately disclose that the price would increase during the second year of the contract. The allegedly misleading practices dated back to 2006.
DirecTV did not acknowledge any wrongdoing. As part of the settlement, it agreed to clearly outline all costs, services offered, length of contracts and terms of cancellations and refunds.
DirecTV Chief Executive Mike White said the complaints by the attorneys general, first vocalized to the company about a year ago, prompted executives to conduct a thorough review of their notifications and marketing. The company already has implemented improvements, White said.
"We want to be clear, transparent and upfront with our customers in what these deals are when people sign up for our service," White said in an interview. "It was important that we resolve these issues because we are a high integrity company and we value our customer service reputation. And frankly, we wanted to get this matter behind us."
The California attorney general's office said it was reviewing 1,136 complaints it received about DirecTV to determine which customers might be entitled to restitution. People who complain about conduct that occurred after Jan. 1, 2007 are eligible for compensation. California residents who believe they were misled by DirecTV have until June 9 to file a complaint with the attorney general's office at http://ag.ca.gov/consumers/general.php.
-- Meg James