Federal regulators are accusing DirecTV of misleading consumers about the cost of its satellite TV service.
According to the lawsuit filed by the Federal Trade Commission on Wednesday, DirecTV advertised a discounted package of TV channels for "12 months," leading many consumers to assume they were signing a 12-month contract. But in fact, the package required a two-year contract—it was only the discounted rate that lasted for 12 months, the FTC said. Prices jumped as much as an extra $45 per month in the second year, and consumers faced early-cancellation fees of up to $480, according to the lawsuit.
Those details were often buried in fine print or obscured by other text in the ads, according to the federal charges.
Additionally, the FTC claims that DirecTV tricked consumers into paying for premium channels such as HBO and Showtime. The satellite TV company offered the channels "free for 3 months," but failed to adequately disclose that it would automatically begin billing customers for the channels after the trial period ended, according to the commission.
"DirecTV misled consumers about the cost of its satellite television services and cancellation fees," FTC Chairwoman Edith Ramirez said in a statement. "DirecTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed. It's a bedrock principle that the key terms of an offer to a consumer must be clear and conspicuous, not hidden in fine print."