DIRECTV tricking consumers into paying more, FTC says

The attention-grabbing ads are everywhere. Get DIRECTV’s satellite TV packages for as little as $19.99 a month for a year! Throw in HBO and Showtime – “free for 3 months.”

It’s encouraged consumers to “ditch cable now” and sign up for satellite TV.

However, before you take the deal, the Federal Trade Commission has warnings.

DIRECTV didn’t give consumers full information about the deal and their viewers got stuck with charges they didn’t know about or approve, said the FTC.

The FTC has charged DIRECTV with deceptive advertising for claiming consumers could sign up for a discounted 12-month service contract but never revealing some key conditions: DIRECTV required consumers to commit to a two-year contract – and during the second year, it hiked up the monthly fee. If you wanted to cancel before the end of the contract, you faced big cancellation fees, up to $480.                                           

In addition, that “free for 3 months” offer for HBO or other premium channels was actually a negative option. If you didn’t remember to cancel before the end of the trial period, DIRECTV signed you up and billed you for the premium channels – which cost about $48 per month.

DIRECTV typically enrolled consumers into the promotion without clearly telling them that they needed to cancel before the end of the trial to avoid being charged, according to the FTC. 

Whether or not you ditch cable, you should check out the details of any deal, said Carol Kando-Pineda, counsel, FTC Division of Consumer & Business Education. When it comes to free offers, do some research.

• What’s the buzz? See what other consumers are saying about a company's free trials — and its service. Complaints from other customers can tip you off to "catches" that might come with the trial. Search the name of the company and “complaint” or “review.”

• What are you getting? Find out the terms and conditions. If you can’t find them, or if you can’t understand exactly what you're agreeing to, don't sign up.

• Watch out for pre-checked boxes. If you sign up for a free trial online, look for already-checked boxes. That checkmark may give the company the green light to continue the offer past the free trial or sign you up for more products — only this time you have to pay.

• Mark your calendar. Your free trial probably has a time limit. Once it passes without you telling the company to cancel your "order," you may be on the hook for more products.

• What’s your exit strategy? Look for info on how you can cancel future shipments or services. If you don't want them, do you have to pay? Do you have a limited time to respond?

• Read your credit and debit card statements. That way you'll know right away if you're being charged for something you didn't order.

Copyright 2015, Rita R. Robison, Consumer Specialist

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