DirecTV has agreed to make sweeping reforms in its advertising practices, to make restitution to consumers who complained and to pay $5 million to the 22 states who banded together to investigate the issue.
"Consumers must be provided clear and complete information about offers, prices and services in order to make wise purchasing decisions," New York Attorney General Eliot Spitzer said.
The states commenced an investigation in March 2003 based upon consumer complaints that:
• Advertised programs were not always viewable;
• Sports programs in DIRECTVs "Sports Package" were, at times, blacked-out;
• All local programming was not available as advertised;
• Many subscribers got poor reception; and
• Cancellation policies were unfair.
Specifically, the Attorneys General raised concerns that small unreadable print in advertisements modified DirecTV's offers and that consumers were locked into contracts before learning exactly what their monetary commitments to DirecTV were.
As part of the settlement, DirecTV has agreed to pay restitution to consumers who complained because:
(1) they were charged a fee for not activating DirecTV in a timely way;
(2) they paid for but did not receive all local channels they expected to receive; or
(3) they were assessed a fee for terminating service before the "free programming offer" period expired.
In settling the investigation, DirecTV agrees that it will clearly inform each of its customers as to the total scope and costs of the consumer's obligation in the event the consumer accepts a DirecTV service and/or equipment offer in its advertisements.
DirecTV also has agreed to improve its advertising by clearly disclosing: additional monthly charges for receivers; any obligations when accepting promotional offers, such as long term commitments and early termination charges; any obligation to activate service or maintain certain levels of service in order to obtain discounted equipment; limitations on availability of local channels, if promoting local programming; and whether blackouts may apply to sporting events offered through sports packages.
The states Delaware, Florida, Georgia, Idaho, Illinois, Kansas, Maryland, Massachusetts, Montana, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Vermont and West Virginia are parties to the agreement with DirecTV.
