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The California attorney general’s office announced a multimillion-dollar settlement with satellite TV provider DirecTV yesterday. The El Segundo-based company will pay more than $13 million to 49 states and the District of Columbia for "misleading sales and marketing practices," the office said in a statement.
“DirecTV won customers by offering special deals with hidden costs, and also extended customers’ contracts without telling them,” Attorney General Jerry Brown said in the press release. California's total share of the settlement is $185,000.
In addition to the $13.25 million settlement, DirecTV will also have to pay restitution to some customers. It will take several months to sort through the 1,136 complaints filed by Californians to determine who is eligible for restitution, said Michelle Quinn, a spokesperson for the attorney general's office.
The two-year investigation found that when repairing problematic DirecTV equipment, company representatives asked customers to sign what appeared to be service documents. Those customers later found out they had unwittingly extended their contracts for two more years, the attorney general said.
Investigators also discovered that the company didn’t deliver on channels it had promised to new subscribers. DirecTV also offered cash-back deals and free trials but did not disclose key details, and some customers paid more than expected, the press release said. The company offered a two-year deal at $29.99 a month but did not disclose that the second year would cost the regular price of $53.99 or $63.99.
DirecTV is the largest satellite provider with 19 million subscribers in the United States and more than one million in California. As part of the settlement, filed in the San Diego Superior Court, DirecTV has promised to clearly state all costs, services offered, length of contracts and terms of cancellations and refunds.
Darris Gringeri, a spokesman for DirecTV, told California Watch yesterday that the company was not at fault. “We felt that it’s always been clear, but we went a step further and made it clearer.”
“It’s disappointing that some of the attorneys general are sensationalizing the announcement to take advantage of the news cycle,” Gringeri said. “We were implementing the majority of these changes before the attorney general brought this to our attention.”
The California attorney general’s office is also party to an ongoing investigation with Dish Network, another satellite provider, for "do not call" violations.
Reuters reported that in 2007, AOL Inc paid $3 million to 48 states and the District of Columbia after customers complained that the company was making it difficult to close their accounts.
Californians who had problems with DirecTV's sales and marketing practices have until June 9 to file a complaint. Only complaints about conduct that occurred after Jan. 1, 2007, are eligible for restitution.**
The attorney general's office said consumers who believe they were misled can file a complaint at: http://ag.ca.gov/consumers/
** This sentences is corrected from a previous version saying complaints after Jan. 1, 2007, are not eligible for restitution.
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