DIRECTV Pays $13M to Stop Consumer Fraud Suit

January 3, 2011

One thing I would like to know is the amount of profits DIRECTV has been able to gather resulting from the practice for which it was sued. First, it is amazing that such practices are allowed to exist in the first place-perhaps more scrutiny and regulation would not allow anti-consumer practices to flourish. Further, what I hate to find out is that the settlement reached is but a fraction of the profits obtained making this sort of legal plays simply a cost of doing business.

DIRECTV has agreed to pay $13.25 million to settle a 48-state lawsuit charging that it misled consumers about pricing and contracts. The settlement must still be approved by the court. But the satcaster has reached an agreement with the 48 state governments that filed suit. Once the agreement is approved by the court, eligible consumers can seek restitution; details of the restitution process were not immediately available.

The lawsuit centered largely on DIRECTVs practice of requiring consumers to enter into two-year contracts for a variety of services from the initial subscription to replacing the satcasters equipment, even if it was defective. But the Plain Dealer reports that the complaint also charged that DIRECTV: Failed to clearly disclose the price that a consumer had to pay for programming and other services and the requirement of a commitment term the 2 year contract. Failed to clearly disclose time restrictions and other limitations on advertised prices. Required consumers to extend their two-year contracts without clearly disclosing the terms. Required consumers to extend their two-year contracts when they asked DIRECTV to replace defective equipment, such as the set-top. Failed to tell consumers that seasonal sports packages, such as the NFL Sunday Ticket, would automatically renew; to cancel the package, theĀ  subscriber had to call DIRECTV.

The Plain Dealer reports that DIRECTV has now agreed to fully disclose prices and contract terms, tell consumers if they are required to pay for sports packages after the first year of subscribing to it, and when the consumer is entering into a binding contract

via DIRECTV Pays $13M to Stop Consumer Fraud Suit.

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