The Federal Trade Commission has filed a complaint in federal court against Satellite TV Provider DirecTV, accusing the company of a bait and switch, luring customers in with low introductory rates, but hiding other onerous restrictions and price increases in the fine print. The promotional price offered to new customers is only good for the first 12 months of a 24 month contract, after which the price goes up by more than 70%. The deal in question also claims to include free access to premium networks like HBO, but after three months, customers are charged full price for the channels unless they call to cancel them first.
The FTC alleges that after being lured in with deceptively low prices, DirecTV customers were locked in deals at far higher prices that they may not have understood or expected. Failing to “clearly and conspicuously” disclose these additional terms of contracts puts DirecTV’s marketing afoul of regulations, according to the complaint.
While DirecTV is the only company named in the FCC’s filing, the tactics under fire are far from unique to the satellite company. Other TV providers are notorious for all sorts of trickery resulting in monthly bills that can be more than twice as high as advertised prices. Considering that price is the number one complaint with pay-TV services, there’s plenty of incentive for TV providers to make the cost appear lower than it actually is. Perhaps the government hopes that making an example of DirecTV will prompt other companies shape up as well.