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DirecTV Inc Informative - DIRECTV offering refunds amid accusations of unfair practices
Many Happy Returns. Thousands of unhappy satellite TV customers around the country will get refunds in the New Year, courtesy of DIRECTV, the nation’s largest satellite TV service.
DIRECTV also promises to change the way it does business. It took a lot of prodding for this to happen: A DIRECTV lawsuit filed by Washington State and a multi-state investigation led by the Attorney General in Tennessee.
Two weeks ago, DIRECTV settled allegations (made by all 50 states and the District of Columbia) that since 2007 it used “deceptive and unfair” marketing practices.
“At a time when people are trying to cut back on expenses, it is important that businesses clearly explain the terms of their service contracts,” said Tennessee Attorney General Robert Cooper in a statement.
DIRECTV holds the dubious honor of having more consumer complaints (about 2,000) filed with the Washington State Attorney General’s office than any other company between 2006 and 2010. In its lawsuit, the state accused DIRECTV of “unconscionable” sales practices.
“We believe that acting in ways that we found to be unfair and deceptive was part of their business model,” Washington AG Rob McKenna tells me.
His lawsuit claimed pricing information “was not adequately disclosed” in the company’s ads or by its telephone sales representatives.
For example, DIRECTV would advertise a monthly price of just $29.99, but didn't always make it clear that this low price was based on a rebate. Also, while the deal required a 2-year contract, the promotional price was good for only 12 months, something else that was often hidden in the fine print.
“We had people complaining that they’d get bills for $50, $60 or $70 when they thought they were only going to be charged $29.99,” says Paula Selis, Washington State’s senior assistant attorney general, who handled the case. “And the company was pretty unwilling to work with people to straighten that out.”
Major allegations
Here are some of the major allegations of unlawful behavior listed in court papers.
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•DIRECTV did not clearly disclose the true cost of the service and that the initial contract was for two years.
•It did not make it clear that a sizeable early termination fee would be charged if the service was canceled before the two-year period ended.
•It extended customers’ contracts without authorization when defective equipment was replaced. Misrepresented the availability of sports programming and did not clearly disclose that seasonal sports packages would automatically renew unless canceled.
•It advertised “free” HD or DVR equipment, but charged $6 to $8 a month for this “upgraded” service.
New way of doing business
DIRECTV has promised the courts it will change its business practices – institute new procedures and stop some previous practices – to ensure potential customers are well-informed about the terms of service and any promotional price or offer.
In an email to msnbc.com, company spokesman Darris Gringeri downplayed the significance of these settlements.
“The fact is, we were implementing the majority of these improvements long before the AGs even brought this to our attention,” he writes. “When our customers let us know there are issues, we decide on our own to fix them, we don’t wait for the AGs to come to us. So while some AGs are grandstanding, we’d rather focus on the customer and move forward with giving them the best service possible.”
While DIRECTV did not admit any wrongdoing, under the settlements it is legally bound to do a number of things. From now on, material terms such as the cost of service, contract length and cancellation penalties must be clearly disclosed next to the price in every advertisement
DIRECTV’s ads are also required to clearly disclose whether a rebate is required to get the promotional price. If the first bill does not reflect the price agreed at the time of sale, DIRECTV must adjust the price or cancel the contract, if requested, without any penalty. If the price difference is because the customer did not properly apply for the rebate, DIRECTV must help with that.
But the agreement covers much more than advertising. From now on DIRECTV:
•Will not charge a cancellation fee if a customer ends services because of a recurring problem that cannot be fixed.
•Cannot require a customer to enter into a new or extended contract when simply repairing or replacing defective equipment. A customer must knowingly agree to any contracts extension.
•Will disclose any limitations to the availability of sports programming or local channels.
•Give customers 30 days notice before any seasonal sports package is automatically renewed.
Ad-itude adjustment
DIRECT TV says it is already adjusting its ads to give more prominent placement to specific details on offers. This includes placing phrases in direct proximity to the offer such as “after rebate,” “with 24 month agreement” and “fees apply” when applicable.
More must-see stories featurepics.com All work and no play (if you have a job)
Life Inc.: Looking back years from now, 2010 will probably not turn out to the year when work-life balance mattered much.
Life Inc.: Calculating the new math of 2010 taxes
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More Americans walking away from mortgages
..Millions could be refunded to unhappy customers
The settlement is good news for Jessica Twardzik of Seattle, who filed a complaint with the Washington State Attorney General’s office. She tells me she switched from cable to DIRECTV because their advertised prices were better.
Advertisement | ad info
But after the satellite dish was installed, the signal kept going out and the repair people who came to her house could not fix the problem. After six weeks of intermittent TV service, she called the company to cancel. Twardzik says she was never told she had agreed to a two-year contract and that she would be hit with a whopping cancellation fee of $458. She refused to pay and was sent to collection.
“It was the worst customer service I ever received in my life,” Twardzik says, “and I’ve worked in customer service my whole life.”
DIRECTV has agreed to resolve complaints already filed about problems that took place after January 1, 2007. Unhappy customers are eligible for a refund or other relief. Those who have not formally complained have until June 9, 2011 to do so with their state attorney general or consumer protection office. For Washington state residents the deadline is May 31, 2011. If the company cannot resolve the complaint, the consumer can take their case to a claims administrator who will issue a decision.
DIRECTV also promises to change the way it does business. It took a lot of prodding for this to happen: A DIRECTV lawsuit filed by Washington State and a multi-state investigation led by the Attorney General in Tennessee.
Two weeks ago, DIRECTV settled allegations (made by all 50 states and the District of Columbia) that since 2007 it used “deceptive and unfair” marketing practices.
“At a time when people are trying to cut back on expenses, it is important that businesses clearly explain the terms of their service contracts,” said Tennessee Attorney General Robert Cooper in a statement.
DIRECTV holds the dubious honor of having more consumer complaints (about 2,000) filed with the Washington State Attorney General’s office than any other company between 2006 and 2010. In its lawsuit, the state accused DIRECTV of “unconscionable” sales practices.
“We believe that acting in ways that we found to be unfair and deceptive was part of their business model,” Washington AG Rob McKenna tells me.
His lawsuit claimed pricing information “was not adequately disclosed” in the company’s ads or by its telephone sales representatives.
For example, DIRECTV would advertise a monthly price of just $29.99, but didn't always make it clear that this low price was based on a rebate. Also, while the deal required a 2-year contract, the promotional price was good for only 12 months, something else that was often hidden in the fine print.
“We had people complaining that they’d get bills for $50, $60 or $70 when they thought they were only going to be charged $29.99,” says Paula Selis, Washington State’s senior assistant attorney general, who handled the case. “And the company was pretty unwilling to work with people to straighten that out.”
Major allegations
Here are some of the major allegations of unlawful behavior listed in court papers.
Advertisement | ad info
•DIRECTV did not clearly disclose the true cost of the service and that the initial contract was for two years.
•It did not make it clear that a sizeable early termination fee would be charged if the service was canceled before the two-year period ended.
•It extended customers’ contracts without authorization when defective equipment was replaced. Misrepresented the availability of sports programming and did not clearly disclose that seasonal sports packages would automatically renew unless canceled.
•It advertised “free” HD or DVR equipment, but charged $6 to $8 a month for this “upgraded” service.
New way of doing business
DIRECTV has promised the courts it will change its business practices – institute new procedures and stop some previous practices – to ensure potential customers are well-informed about the terms of service and any promotional price or offer.
In an email to msnbc.com, company spokesman Darris Gringeri downplayed the significance of these settlements.
“The fact is, we were implementing the majority of these improvements long before the AGs even brought this to our attention,” he writes. “When our customers let us know there are issues, we decide on our own to fix them, we don’t wait for the AGs to come to us. So while some AGs are grandstanding, we’d rather focus on the customer and move forward with giving them the best service possible.”
While DIRECTV did not admit any wrongdoing, under the settlements it is legally bound to do a number of things. From now on, material terms such as the cost of service, contract length and cancellation penalties must be clearly disclosed next to the price in every advertisement
DIRECTV’s ads are also required to clearly disclose whether a rebate is required to get the promotional price. If the first bill does not reflect the price agreed at the time of sale, DIRECTV must adjust the price or cancel the contract, if requested, without any penalty. If the price difference is because the customer did not properly apply for the rebate, DIRECTV must help with that.
But the agreement covers much more than advertising. From now on DIRECTV:
•Will not charge a cancellation fee if a customer ends services because of a recurring problem that cannot be fixed.
•Cannot require a customer to enter into a new or extended contract when simply repairing or replacing defective equipment. A customer must knowingly agree to any contracts extension.
•Will disclose any limitations to the availability of sports programming or local channels.
•Give customers 30 days notice before any seasonal sports package is automatically renewed.
Ad-itude adjustment
DIRECT TV says it is already adjusting its ads to give more prominent placement to specific details on offers. This includes placing phrases in direct proximity to the offer such as “after rebate,” “with 24 month agreement” and “fees apply” when applicable.
More must-see stories featurepics.com All work and no play (if you have a job)
Life Inc.: Looking back years from now, 2010 will probably not turn out to the year when work-life balance mattered much.
Life Inc.: Calculating the new math of 2010 taxes
Your Career: What got readers talking in 2010
More Americans walking away from mortgages
..Millions could be refunded to unhappy customers
The settlement is good news for Jessica Twardzik of Seattle, who filed a complaint with the Washington State Attorney General’s office. She tells me she switched from cable to DIRECTV because their advertised prices were better.
Advertisement | ad info
But after the satellite dish was installed, the signal kept going out and the repair people who came to her house could not fix the problem. After six weeks of intermittent TV service, she called the company to cancel. Twardzik says she was never told she had agreed to a two-year contract and that she would be hit with a whopping cancellation fee of $458. She refused to pay and was sent to collection.
“It was the worst customer service I ever received in my life,” Twardzik says, “and I’ve worked in customer service my whole life.”
DIRECTV has agreed to resolve complaints already filed about problems that took place after January 1, 2007. Unhappy customers are eligible for a refund or other relief. Those who have not formally complained have until June 9, 2011 to do so with their state attorney general or consumer protection office. For Washington state residents the deadline is May 31, 2011. If the company cannot resolve the complaint, the consumer can take their case to a claims administrator who will issue a decision.
Comments:
Posted by madconsumer on 2010-12-30:
it is the least they can do.
Posted by Skye on 2010-12-30:
Great news Wally. I'm sure those with Direct TV will appreciate this!
Posted by littleshorty on 2010-12-30:
Good to see a company make things right
Posted by trmn8r on 2010-12-30:
Good post Wally. As madconsumer said, this is the *least* that could be done. I wrote elsewhere today that I examined a DTV ad I received yesterday carefully, and it was chock full of fine print that I could barely read.
OK, my eyes aren't what they used to be, but it was just like this lawsuit says. It was $24.99 above, but there were numerous footnotes about rebates only for the first year, 2 year contract, features available only if you got the Slick Willy upgrade, etc etc.
I did some quick math and decided I'd be paying $50++ in month 13, and probably more than $24.99 in month 1. For shame.
OK, my eyes aren't what they used to be, but it was just like this lawsuit says. It was $24.99 above, but there were numerous footnotes about rebates only for the first year, 2 year contract, features available only if you got the Slick Willy upgrade, etc etc.
I did some quick math and decided I'd be paying $50++ in month 13, and probably more than $24.99 in month 1. For shame.
Posted by tnchuck100 on 2010-12-30:
I will bet when the flames die down it will be right back to business as usual. To DirecTV this is nothing more than a cost of doing business.
Good post Wally.
Good post Wally.
Posted by Wally86 on 2010-12-30:
Yeah I posted it for those folks who are having trouble with DTV. Maybe they can get in on the refund.
Posted by littleshorty on 2010-12-30:
Good thing I never switched to DTV. I'll stick with Cox
Posted by ript on 2010-12-30:
Git 'r done Washington state! Nice, Wally.
Posted by singsing on 2010-12-30:
I luv Washington State. Good informative Wally. I hadn't heard anything about this. I am sure this decision will make many people happy. Sometimes the consumer wins.
Posted by Prince-Caesar on 2010-12-31:
lol making things right? After they were SUED! They deserve every penny they lose!
Posted by Wally86 on 2010-12-31:
Yeah I doubt they would have done anything if the AG didn't call them out for being crooked.
Posted by tnchuck100 on 2010-12-31:
Has anyone else noticed that whenever one of the crooked companies "settle" a law suit they ALWAYS do so "without admitting any wrong doing"?
Sleaze balls! All of these "contract" based services!
Sleaze balls! All of these "contract" based services!
Posted by faes4paws on 2011-01-04:
It's about time someone took them to task. Good job! But I think more needs to be done to the entire industry.
One of the things missing from the article, is what happened in the lawsuit to the 'extra' monthly charge for using the DVD/TiVo player you purchased from them? I paid full price for the unit and still they added on a monthly usage fee, which was the same amount they would have charged me if I'd only rented it. That was never ever mentioned when I opted for purchasing the unit.Will that nasty practice be discontinued?
One of the things missing from the article, is what happened in the lawsuit to the 'extra' monthly charge for using the DVD/TiVo player you purchased from them? I paid full price for the unit and still they added on a monthly usage fee, which was the same amount they would have charged me if I'd only rented it. That was never ever mentioned when I opted for purchasing the unit.Will that nasty practice be discontinued?
Posted by Sassy2 on 2011-01-04:
This is good news for some people but there is still a lot to be done and many other lawsuits to be filed on behalf of everyone DTV has taken advantage of over the years.I still will tell everyone to keep filing those complaints with the BBB,FTCand Attorney Generals and lets make them operate honest or put them out of business!!
Posted by CeeTwo on 2011-01-04:
These practices are exactly the same as the ones used by DishNetwork - so why aren't they involved? Because no one took the time to complain about them?
Posted by HOCKEYLOVER on 2011-01-05:
Read the replies about dtv,but what about the equipment in my house what do i do with it,also i
made the mistake of being billed thru my qwest phone
service,so now that's tied together bad move on my part,i also tried to cancel was told it would cost me 350.00 to do so was not mentioned at all
to they are using the same scam's as cell phone
companies do. I wanted to reduce my cell bill to
a mangeable amount but was told that i could not
until i paid my bill in full which kept getting worst by the minute (no pun intended),thank's
made the mistake of being billed thru my qwest phone
service,so now that's tied together bad move on my part,i also tried to cancel was told it would cost me 350.00 to do so was not mentioned at all
to they are using the same scam's as cell phone
companies do. I wanted to reduce my cell bill to
a mangeable amount but was told that i could not
until i paid my bill in full which kept getting worst by the minute (no pun intended),thank's
Posted by supa* on 2011-01-09:
I have a question for you about this cause I had direct TV an they charged me $600 for a cancellation fee would i be entitled for my money back?
Posted by Sassy2 on 2011-03-29:
Supa,I'd sure file a complaint and try to get my money back if I were you
Posted by linda on 2013-04-29:
living on a Budget and they are getting half my pay have grandchildren that love disney channel my bill is up to 70.00dollars a month for choice package (ashame)
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