Four Ways DirecTV Deceived Consumers, According to FTC Lawsuit
March 12th, 2015
Maybe DirecTV’s “Poor Decision Making Rob Lowe” is down with deceptive advertising, but the FTC most certainly is not. The agency is suing DirecTV for allegedly misleading consumers about the costs of its satellite television service. The lawsuit is seeking what could amount to millions of dollars in refunds for DirecTV customers. It alleges that DirecTV deceptively advertised a discounted one-year programming package by failing to clearly disclose:
- That the package comes complete with the shackles of a two-year contract.
- That the monthly cost of programming increases anywhere from $25 to $45 in the (mandatory) second year of the contract.
- That there is a penalty for leaving DirecTV before the two-year contract is up and it is typically $20 for each remaining month.
- That customers must take it upon themselves to opt out of receiving premium channels, such as HBO and Showtime, before a three-month trial period has expired, or else, going forward, be charged around $48 per month under the negative-option offer, which the FTC found to violate ROSCA.
The nation’s largest provider of satellite television, DirecTV has more than 20 million subscribers across the U.S., according to the FTC. An agency spokesperson told TINA.org that a “substantial portion” were affected by the FTC’s allegations. AT&T, which has faced its own federal lawsuits alleging deceptive advertising, is in the midst of trying to acquire DirecTV.
DirecTV did not immediately respond to a request for comment from TINA.org but a company spokesperson told the New York Times: “The FTC’s decision is flat-out wrong, and we will vigorously defend ourselves, for as long as it takes. We go above and beyond to ensure that every new customer receives all the information they need, multiple times, to make informed and intelligent decisions.”
DirecTV also appears to be reeling but ready to defend itself against a separate decision by the National Advertising Division. After a recent challenge from its cable counterpart Comcast, the ad industry’s self-regulatory body recommended that the company stop running several apparent cable superiority claims appearing in Rob Lowe alter-ego commercials like the “poor decision” version above.
NAD cited a lack of supporting evidence for the claims. DirecTV, which is appealing the decision to the National Advertising Review Board, countered that the commercials are so funny that no one takes them serious:
…the various Rob Lowe advertisements are so outlandish and exaggerated that no reasonable consumer would believe that the statements being made by the alter-ego characters are comparative or need to be substantiated.
Read more of our coverage on television services here.
This story was updated 4/8/15.
Recurring offers or subscriptions that continue to bill you until you take steps to shut down the account. These types of offers put the onus on the consumer to remember and to take action, allowing a company to keep gathering in cash from forgetful or busy customers. Be wary of these types of offers, and remember to stop services you no longer want.