(This is a two-part story. The first story is about the recent settlement by DirectTV for $13.25 million in a settlement with all 50 states over customer complaints of deceptive practices.
The second part is a similar story that is about a year old when DISH network made the same kind of settlement.)
DirectTV agrees to $13.25 Million Settlement With All 50 States
DIRECTV, one of the most complained-about companies in the country, has reached a settlement with all 50 states and the District of Columbia on a variety of consumer protection issues, including its notorious cancellation penalties.
The company has agreed to pay about $14 million and abide by a collection of rules of conduct for how it will treat its customers.
Curiously, the settlement comes almost exactly five years after a 22-state settlement was reached with DIRECTV over similar accusations. Complaints against the company have mounted in recent years, with more than 41,000 complaints processed just by the Better Business Bureau over the past three years.
Once again, this is Corporate America deliberately ripping off American consumers. They have a monopoly over American television and they could care less about these law suits. They will just add it onto next year’s rates and the mamby-pamby regulators will let them get away with it.
The latest round of state actions started exactly one year ago when Washington’s Attorney General sued DIRECTV. Washington Attorney General Rob McKenna’s office said the 2,000 complaints against the company made it the single largest source of complaints.
Washington settled its case separate from the collective settlement with other states, but with largely the same terms and a $1 million payout to McKenna’s office. DIRECTV, as is customary in settlements, admitted no wrongdoing.
“Under our settlement, DIRECTV agrees to disclosures that will help consumers know exactly what they’re signing up for so that there are no painful surprises,” McKenna said in a statement.
The company took an upbeat approach to reaching the settlements.
“DIRECTV has worked hand-in-hand with the Attorneys General to formalize many of the customer improvements we have made over the past few years and are pleased to have come to this agreement,” Mike White, chairman, president and CEO of DIRECTV, said in a statement. “DIRECTV is committed to always operating with the highest standards of integrity and will move forward with continued dedication to providing the best video experience possible for our customers.”
The settlements are supposed to end the long-vilified DIRECTV policy of imposing hundreds of dollars in cancellation penalties even if the reason for the customer canceling was due to the inability to receive a DIRECTV signal.
Refunds for certain complaints will handled by the states. Generally, they would be given to those who have lodged formal complaints with an attorney general’s office. It may still be possible to file a complaint for a past issue you’ve had with DIRECTV.
According to Washington officials, here are some of the agreed-upon policies:
- Cancellation Fees: DIRECTV will not impose a cancellation fee on a consumer who ends service because of a recurring problem that can’t be fixed.
- Advertising and Sales Disclosures: The company must clearly disclose the cost of the service, the contract length, additional charges for HD or DVR equipment, cancellation penalties, whether a promotional price is conditional on a rebate, whether an offer requires a particular payment, and other pertinent details. Extremely important disclosures, such as the requirement for a rebate, the required term of the consumer’s commitment and the period the promotional price will be charged, must be disclosed in direct proximity to the price itself.
- Contract Changes: DIRECTV can’t require consumers to enter into a new or extended contract when simply replacing or repairing defective equipment. If a service upgrade or other change by a consumer requires a new or additional term of commitment, DIRECTV must first obtain the consumer’s consent to enter into a new or extended contract.
- Rebates and Promotional Offers: DIRECTV must disclose whether a rebate is required to obtain the promotional price. If the consumer’s first bill does not reflect the price agreed to at the time of sale, DIRECTV must either provide that price or cancel the contract without penalty, if requested.
Dish Network dishes up millions to settle complaints filed by 46 states
Dish Network has reached an agreement with 46 states’ attorneys general to pay nearly $6 million plus restitution to settle allegations of deceptive consumer marketing and a lack of disclosure about costs and service limitations.The states came after Dish after thousands of consumer complaints were lodged.
Consumers with complaints against Dish are eligible for restitution from the settlement if they have filed a complaint with their state’s attorney general or Dish Network between Jan. 1, 2004 and July 9, 2009. Complaints eligible for compensation from the settlement will continue to be accepted through Dec. 14 as long as it involves problems that happened over the past two years.
Dish was the subject of more than 13,000 closed complaints over the past three years just to the Better Business Bureau (pending complaints are not disclosed). Despite the volume and nature of the complaints and a pending federal action over alleged telemarketing violations, the BBB rates Dish — a dues-paying member of the business organization — a “B.”
UPDATE: Competitor DirecTV, which draws similar complaints from consumers, was assessed more than $2 million in penalties by the Federal Trade Commission earlier this year for alleged telemarketing violations. The BBB also rates DirecTV a “B,” after amassing more than 30,000 complaints, explaining the company has been responsive to formal complaints.
Among the complaints filed with the state and the BBB regarding the Dish Network: Dish and its authorized retailers would offer big packages with discounts for a two-year commitment from consumers and then boost the price and/or reduce service. Consumers who then wanted to cancel their service were told they would face hundreds of dollars in cancellation penalties. Dish also was accused of drawing payment from customers’ bank accounts and credit cards without proper warning or authorization and violating Do-Not-Call telemarketing laws. Also, customers complained they were not informed that their premium sports packages were subject to blackout and that they might not receive their local TV stations.
“DISH Network’s misleading marketing beamed bad deals to thousands of consumers, causing financial hardships for those on limited incomes,” Washington Attorney General Rob McKenna said “This agreement makes the picture much clearer as to what business practices are acceptable.”
McKenna’s office cited the example of a senior citizen who had to pay $100 in overdraft fees after Dish drained her bank account.
To settle the cases, Dish agreed to fully disclose the terms and conditions of its contracts with consumers in plain English. In resolving the complaints, Dish, which claims more than 13 million customers of its satellite TV service, admitted no wrongdoing.
“Customer satisfaction has always been a top priority for DISH Network, and we continuously implement new approaches to strengthen our customer relationships,” Tom Cullen, executive vice president of DISH Network said in a statement.
The only states not party to the settlement are: California, Illinois, North Carolina and Ohio. Those states did not accept the terms of the settlement. A copy of the settlement can be found here.
For consumers who don’t want to accept Dish’s restitution offer can appeal to a third-party claims administrator at CEO@dishnetwork.com. Questions may also be sent to that address.