Scam of the day – March 18, 2015 – FTC sues DirecTV over deceptive advertising

Not all scams are perpetrated by scammers working in the shadows.  Sometimes scams are done by major companies and that is what the Federal Trade Commission is alleging in its recent lawsuit filed against DirecTV, the country’s largest satellite television provider.  The FTC is alleging that DirecTV’s advertising of its two-year service promotion is deceptive.  Everyone is familiar with DirecTV’s television advertisements featuring Rob Lowe, but the FTC is saying that a “substantial portion” of DirecTV’s 20 million subscribers in the United States are not familiar with the terms of their contract with DirecTV.  According to the FTC, DirecTV advertises a contract for its services as a one year subscription starting at $19.99 per month, but does not clearly indicate that this offer requires a two year commitment by the customer with escalating costs of up to an additional $45 per month in the second year of the contract and carries a large cancellation fee of up to $450 for early cancellation during the term of the contract.

DirectTV denies the allegations and insists that it provides customers with all of the information they need to make informed decisions.

This is not the first time that the FTC has brought actions against DirecTV.  In 2005 and then again in 2009, DirectTV settled charges brought by the FTC regarding telemarketing violations by paying 7.6 million dollars.

TIPS

We have come a long way since the days of “caveat emptor,” which is Latin for “let the buyer beware.”  The FTC may well be successful in its action against DirecTV.  Most disputes of this nature are eventually settled with the companies agreeing to pay a financial penalty that is often returned to its customers while the companies do not admit wrongdoing, but paradoxically promise never to do what they have been accused of again.  This is a strong lesson to all  consumers to always make sure that we read the “fine print,” recognizing that rarely is there anything fine in fine print.  More often it is where onerous terms of an agreement are found.

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