DirecTV Inc. Settles Misleading-Advertising Complaints

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The satellite TV giant agrees to pay state governments $13.25 million and reimburse customers who claimed the company did not adequately explain price policies.

DirecTV Inc. has settled misleading-advertising complaints, agreeing to pay state governments $13.25 million and reimburse customers who claimed the company did not adequately explain price policies.

The settlement ended complaints brought by 50 state attorneys general that the satellite television giant, based in El Segundo, lured customers to sign up for service by offering deals without fully explaining the costs of the contract.

For example, DirecTV offered a promotional rate of $29.99 a month when the regular charges for service were $53.99 or $63.99 a month. But the company did not adequately disclose that the discounted price would increase during the second year of the contract, California Atty. Gen. Jerry Brown said in a statement.

Subscribers also were promised programming, including local channels and sports networks, that they did not receive, according to state officials. And in some cases, contracts were extended without the knowledge of customers. The practices dated back to 2006.

DirecTV did not acknowledge wrongdoing as part of the settlement. The company did, in documents filed Wednesday in San Diego County Superior Court, agree to clearly outline all costs, services offered, length of contracts and terms of cancellations and refunds for its service. The settlement requires court approval before becoming final.

DirecTV Chief Executive Mike White said the complaints by the attorneys general a little more than a year ago prompted executives to conduct a thorough review of their notifications and marketing. The company already has implemented improvements, White said.

“We want to be clear, transparent and upfront with our customers in what these deals are when people sign up for our service,” White said. “It was important that we resolve these issues because we are a high-integrity company and we value our customer-service reputation. And frankly, we wanted to get this matter behind us.”

The California attorney general’s office said it was reviewing 1,136 complaints it received about DirecTV to determine which customers might be entitled to restitution. California residents who believe they were misled by DirecTV in 2007 or later have until June 9 to file a complaint with the attorney general’s office.

Consumer Watchdog, a Santa Monica nonprofit, was taken aback by the settlement. The group also sued DirecTV two years ago, alleging deceptive practices, said founder Harvey Rosenfield. He criticized Wednesday’s settlement as not going far enough to protect consumers. The group was unaware that the attorneys general were looking into DirecTV’s practices or negotiating a settlement.

“I don’t think this will conflict with our case. We’re still moving forward,” Rosenfield said.

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