The ubiquitous ads for DirecTV featuring Rob Lowe are ever-changing. In the wake a recent Federal Trade Commission action against DrecTV, we can imagine yet another commercial, with the famous former Brat Packer uttering these lines: 'I'm Rob Lowe, and here's the price you'll pay for DirecTV. And I'm Hidden-in-the-Fine-Print Rob Lowe, and we're actually going to jack up your bill.”
Earlier this month, the FTC filed a complaint against DirecTV, the country’s biggest provider of satellite television, for deceptive advertising. Regulators told reporters they are seeking "many millions of dollars" in refunds for a large portion of DirecTV’s 20 million subscribers. The FTC has accused the company of promoting discounted prices, while the real costs and obligations are hidden in the fine print.
The complaint details how DirecTV advertises monthly prices that are good for one year. But it’s actually a two-year commitment, and the price goes up dramatically in year two. If a subscriber tries to cancel service before the two years are up, she gets hit with hefty penalties.
And the complaint doesn’t stop there. DirecTV is also accused of failing to adequately disclose that its offer of free premium channels such as HBO and Showtime for three months has a big catch—you have to proactively cancel the channels, or you can expect your credit or debit card to be charged automatically, the FTC said.
After the FTC filed its complaint, a DirecTV spokesperson told reporters, "The FTC's decision is flat-out wrong, and we will vigorously defend ourselves for as long as it takes.”
At Consumers Union, the policy and advocacy arm of Consumer Reports, we think this story is all too familiar. Consumers are told they’ll pay one price, only to find unexpected fees and rate hikes over the course of their relationship with a service provider.
We're glad the FTC is going after these kinds of abuses. This action comes on the heels of FTC actions against T-Mobile and AT&T for cramming unauthorized third-party charges on customers’ wireless phone bills.
When you sign up for satellite TV or another service, you deserve to know exactly what you’re going to be charged in the future before you get your first bill. The price you see in ads ought to be the price you pay, and if the real price isn’t clearly disclosed, the company should be the one that gets penalized, not the customer.
This feature is part of a regular series by Consumers Union, the policy and advocacy arm of Consumer Reports. The nonprofit organization advocates for product safety, financial reform, safer food, health reform, and other consumer issues in Washington, D.C., the states, and in the marketplace.
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