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DirecTV Settles With All 50 States

PHOENIX (CN) - DirecTV settled consumer fraud complaints from 49 states for $13.25 million. The states, and consumers, complained of a litany of DirecTV's sales practices, fees and policies. DirecTV will pay $1 million to Washington state in a separate settlement.

In a typical complaint, Arizona Attorney General Terry Goddard claimed that DirecTV advertised "prices that include rebate amounts that do not apply to all consumers, require a lengthy redemption period before taking effect, expire prior to redemption and are procedurally difficult to redeem."

The company failed to clearly disclose limitations on advertised prices - advertising a set price for 12 months although its "programming and terms and conditions are subject to change at any time," according to Arizona's complaint in Maricopa County Court.

DirecTV also failed to disclose the length of the consumer's service commitment, equipment fees, early cancellation fees, and allowed retailers to "deceptively give the appearance of being DirecTV employees and agents in their advertisements."

Goddard said DirecTV's third-party retailers, including Best Buy and Wal-Mart, "fail to disclose material terms such as the existence of a service commitment, the length of service commitment, the existence of cancellation fees, that equipment is leased and not purchased, and promise prices and programming that are not available."

DirecTV and its hucksters charged more for programming than they promised over the phone, "include discounts that do not immediately apply, require application and processing of rebates for which not all consumers qualify, and/or require consumers to accept additional terms, such as receiving online account statements."

DirecTV did not disclose early cancellation fees of up to $480, a $150 fee for each receiver that is not activated, and a $55 to $470 fee for each receiver that is not returned.

DirecTV installers misrepresent equipment lease addenda as "installation documents," "work orders" or installation confirmation, "rather than a binding contract with DirecTV for satellite television service that contains material terms binding upon the consumer such as cancellation fees, length of service commitment, mandatory arbitration of disputes and agreement that any credit card or debit card used to make a payment on the account may be charged for any cancellation fees, equipment non-return fees and non-activation fees," according to the complaint.

DirecTV often produced the addendum after the equipment was installed, "giving consumers no way to review and decline the terms before installation."

DirecTV also failed to give consumers a copy of the customer agreement, which allowed it to change pricing and programming, until "after the consumer is already bound by its terms."

DirecTV has been sued at least 327 times since 2007, according to the Courthouse News database, including 73 class actions.


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