FTC charges DIRECTV with deceptive advertising

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Direct TV

Even when consumers use due diligence and read terms and conditions, there is no guarantee that they will get an accurate picture of the real cost of free or discounted services offered by some businesses, according to Connecticut Better Business Bureau.

The Federal Trade Commission (FTC) recently announced two cases of deceptive advertising that it says put consumers at a disadvantage.

The FTC charges DIRECTV, in its promotion of discounted monthly prices, “failed to disclose about a two year contract obligation, significant increases in the second year, and the need to cancel “free” premium movie channels.”  The federal agency says DIRCTV does not make clear disclosures to help consumers understand what happens after an introductory price period and what is required if they want to cancel.

In another action, the FTC says it has arranged an $8 million settlement for consumer restitution with Allstar Marketing Group, LLC., for failing to disclose hidden fees when selling “as-seen-on-TV” products when they offer a “buy one get one free” promotion.

Connecticut Better Business Bureau says these cases illustrate how important it is to not only read terms and conditions, but also to ask specific questions when signing up for a free or discounted services offer.

These should include:

  • What happens after the free trial ends?
  • Will I be automatically billed at a higher price at the end of the special offer?
  • By accepting the offer, am I signing a contract for service beyond the trial period?

To help avoid problems associated with free and discount offers, Connecticut BBB recommends:

Research the company – Visit bbb.org to see whether there is a pattern of consumer complaints about free trial problems.

Watch for pre-checked boxes when singing up online – They may mean you are giving the company authorization to make repeated credit charges, extend the offer or sign you up for more products – likely at a significantly higher price.

Know how to cancel – Be certain that you understand how long in advance you have to give notice to cancel and the procedure for canceling and any associated fees.  Keep all of your paperwork to show you met termination requirements.

Mark your calendar – Put a note on your calendar before the end of the trial so that if you change your mind and don’t want the service, you can make sure that you can meet a cancellation deadline

Watch for unexpected charges If you did not read the terms and conditions, you may be billed for services or products you never ordered.  Keep a close watch on credit card statements for any charges for products or services you did not order.

Howard Schwartz, Executive Communications Director, CT Better Business Bureau