DirecTV Settles Probe Into Marketing, Advertising Practices|
Satellite TV company DirecTV has agreed to pay $5 million to settle a 22-state investigation into its marketing and advertising practices, state attorneys general said Monday.
The El Segundo, Calif.-based, company also agreed to pay restitution to the thousands of customers who complained about various services and cancellation policies and fees.
The multi-state investigation began in March 2003 after consumers complained that DirecTV's advertised programs were not always viewable, sports programs offered in packages were sometimes blacked out, local programming was not available as advertised and cancellation policies were unfair. Many customers also complained about poor reception.
During the investigation, state attorneys general raised concerns that small unreadable print in advertisements changed DirecTV's offers and that the company locked consumers into contracts before they full understood their monetary commitments to the company.
"Consumers must be provided clear and complete information about offers, prices and services in order to make wise purchasing decisions," Eliot Spitzer, attorney general for New York, said in a statement.
In Pennsylvania, consumers complained that they were charged fees or penalties up to $150 when they attempted to cancel service contracts after finding out about blackout restrictions on sports packages, Attorney General Tom Corbett said.
"Many consumers, understandably, were frustrated when they wrote checks each month to DirecTV for services that they failed to receive," Corbett said in a separate statement. "Worse yet, when they attempted to get out of the contracts, they were charged significant termination fees."
As part of the settlement, DirecTV has agreed to pay restitution to customers who complained that they were charged a fee for not activating DirecTV in a timely way, that they paid for, but did not receive, all local channels, and that they were assessed a termination fee when they cancelled before the "free programming offer" expired.
In addition, DirecTV agreed to improve its advertising by clearly disclosing additional monthly charges for receivers; any obligations when accepting promotional offers, such as long term commitments and early termination charges; any obligation to activate service or maintain certain levels of service in order to obtain discounted equipment; limitations on availability of local channels, if promoting local programming; and whether blackouts may apply to sporting events offered through sports packages.
States that joined New York and Pennsylvania in the investigation and settlement were Delaware, Florida, Georgia, Idaho, Illinois, Kansas, Maryland, Massachusetts, Montana, Nebraska, Nevada, New Jersey, New Mexico, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Vermont and West Virginia.
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