DIRECTV has settled a lawsuit filed by the Federal Trade Commission which charged the satcaster with engaging in deceptive advertising practices, according to Law 360.
The suit, which was filed in federal court in March 2015, said DIRECTV’s discounted 12-month promotional plans failed to disclose they require a two-year contract.The federal agency added that the satcaster did not disclose that a customer might have to pay up to $45 a month more in the second year of the deal.
If the new DIRECTV subscriber tries to cancel before the two-year agreement has expired, he would have to pay up to $480 in early cancellation fees, the FTC noted.
The case was scheduled to go to trial today, but Law 360 said the parties settled “in principle” on Monday. The court scheduled a conference with DIRECTV and the FTC in April to finalize the details of the deal, according to court documents.
“DIRECTV and the FTC’s Bureau of Consumer Protection have today reached an agreement in principle on the material terms of a settlement, which, if approved by the commission, would resolve all claims in this case,” the court motion stated, according to Law 360. “DIRECTV respectfully requests that the trial be continued. The commission does not oppose this motion.”
The two sides did not disclose any terms of the settlement in principle.
The FTC was seeking a court order that would permanently bar DIRECTV from engaging in illegal conduct as well as a financial penalty that could be used as refunds to the satcaster’s subscribers.
The FTC also said DIRECTV failed to disclose that its offer of three free months of a premium channel, such as HBO or Showtime, required consumers to proactively cancel the channel at the end of the promotional period or else they would be charged in future months.
Two years ago, DIRECTV blasted the FTC’s complaint, saying in a statement that the agency is “flat-out wrong. We will vigorously defend ourselves, for as long as it takes…We go above and beyond to ensure that every new customer receives all the information they need, multiple times, to make informed and intelligent decisions”
— Phillip Swann