The charges stem from DirecTV’s advertisement for its 12-month package, which does not clearly disclose the requirement for a two-year contract. To make matters worse, after the first year, prices would increase $45 more per month, with cancellation fees reaching up to $480 if customers decide to leave the contract before its expiration.
The FTC also alleges DirecTV didn’t properly inform customers of its deal for three months of free premium channels, arguing that customers would need to actively cancel these channels after an introductory period in order to avoid being charged by the provider.
“DirecTV misled consumers about the cost of its satellite television services and cancellation fees,” said FTC chairwoman Edith Ramirez in today’s announcement of the charges. “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 customer must be clear and conspicuous, not hidden in fine print.”
With the charges, the FTC hopes to permanently bar DirecTV from conducting similar activity in the future through a court order. In addition, there could be financial compensation for affected customers.
DirecTV is currently in the middle of a $48.5 billion merger with AT&T, a merger that has yet been approved by federal regulators, who are also considering the merger between Comcast and Time Warner.
