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SAN DIEGO – Attorney General Edmund G. Brown Jr. today announced a $13 million settlement with DIRECTV plus restitution for customers who were subjected to the satellite TV company’s misleading sales and marketing practices.
“DIRECTV won customers by offering special deals with hidden costs, and also extended customers’ contracts without telling them,” Brown said. “With this settlement, DIRECTV will reimburse customers and change its sales and advertising practices to comply with the law.”
The settlement by Brown and 48 other state attorneys general was filed today in San Diego Superior Court. It requires DIRECTV to make full restitution to all victims. In addition, the company is required to pay $13.25 million to the 49 states and the District of Columbia in civil penalties and costs, and obey state laws.
DIRECTV, based in El Segundo, has more than 18 million subscribers nationwide with more than one million in California.
The multi-state investigation found the company engaged in practices that misled customers about how much they would be required to pay and what kind of programming they could expect. The investigation established that DIRECTV:
• Extended contracts without customers’ knowledge. When the company serviced faulty DIRECTV equipment, its representative asked customers to sign what appeared to be service documents. Customers later learned that their signatures had extended their contacts for another two years.
• Failed to deliver promised channels. In its promotions, the company promised potential subscribers access to sports channels and local stations, but subscribers discovered that some of the promised programming was not available.
• Change the terms of promotions. The company offered cash-back deals and free trials but did not disclose key details, and some customers ended up paying more than expected. For example, DIRECTV offered a two-year deal at $29.99 a month (compared to a typical charge of $53.99 or $63.99) but did not disclose that the second year was at the regular price.
As part of today’s settlement, DIRECTV agreed to clearly state all costs, services offered, length of contracts and terms of cancellations and refunds.
Brown’s office is reviewing the 1,136 complaints it has received about DIRECTV to determine which customers are entitled to restitution. Complaints about conduct that occurred after January 1, 2007 are eligible for restitution. Californians who believe they were misled by DIRECTV have until June 9 to file a complaint with the Attorney General’s office at http://ag.ca.gov/consumers/general.php.
Copies of the Attorney General’s complaint and settlement judgment announced today are attached.