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TRENTON
– Attorney General Paula T. Dow announced
today that New Jersey has entered into a
multi-state settlement agreement with DIRECTV
that resolves allegations the satellite
television provider engaged in deceptive
and unfair business practices.
In
addition to paying the 50 states a total
of $13.2 million, the California-based DIRECTV
has agreed to pay restitution to consumers
and to alter its business practices in the
future.
Among
other things, DIRECTV has agreed to clearly
disclose to consumers all material terms
of contracts, including price, commitment
term, rebate instructions and termination/equipment
return fees. The company has also agreed
to replace leased equipment that is defective
at no cost, except the cost of shipping,
to clearly disclose all limitations on the
availability of local channels, and to not
misrepresent the availability of sports
programming.
In
2005, DIRECTV entered into a settlement
agreement with New Jersey and 21 other states
regarding a number of sales and advertising
issues. In 2008, a working group of the
states was formed to investigate the company’s
compliance with that agreement. During the
investigation, the working group examined
consumer complaints and identified a number
of concerns regarding DIRECTV’s sale
and maintenance of satellite television
services. The settlement announced today
addresses those concerns.
In
addition, through the Division of Consumer
Affairs, the State worked with DIRECTV prior
to the settlement to resolve 280 complaints
filed by New Jersey consumers. The resolutions
were handled on a case-by-case basis, and
included refunds or credits, or other relief,
as appropriate. It is anticipated that complaints
submitted to DIRECTV post-settlement –
including complaints recently received by
the Division of Consumer Affairs and complaints
received after the settlement is filed --
will be handled in a similar fashion.
Unresolved
complaints that involve conduct addressed
in the settlement, and which occurred after
January 1, 2007, are eligible for the restitution
program. In addition, consumers can file
a complaint with DIRECTV or the Division
of Consumer Affairs by June 9, 2011, to
be considered for the restitution program
as long as the complaint pertains to activity
that occurred after January 1, 2007. DIRECTV
has agreed to attempt to resolve the complaints
working directly with consumers. Complaints
that cannot be resolved by DIRECTV will
be submitted to a third party Claims Administrator
for resolution.
DIRECTV
is one of the nation’s largest providers
of satellite television service. Generally,
the company leases equipment to a consumer
in exchange for the consumer’s agreement
to purchase a minimum level of DIRECTV services
for up to two years. As of the end of 2009,
DIRECTV had more than 18.5 million subscribers
throughout the country.
Complaints
about DIRECTV received by New Jersey and
the other states included that the company:
-
Did not clearly disclose the price that
consumers would be charged and the commitment
term that consumers would be required
to keep
-
Did not clearly disclose to consumers
limitations on getting a certain price
for DIRECTV
-
Enrolled consumers in additional contracts
or contract terms without clearly disclosing
the terms to the consumer
-
Enrolled consumers in additional contracts
when replacing defective equipment
-
Did not clearly disclose to consumers
that they would automatically renew a
seasonal sports package
-
Offered cash back to consumers but then
provided the consumer with bill credits
instead.
Under
terms of the settlement announced today,
New Jersey will receive $185,000 to be used
to cover attorneys’ fees and investigative
costs, and to support future consumer protection
efforts. Deputy Attorney General Nicholas
Kant, of the Division of Law’s Consumer
Fraud Prosecution Section, and Investigator
Cullen Church, of the Division of Consumer
Affairs’ Office of Consumer Protection,
handled the DIRECTV matter on behalf of
the state.
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