Moral of DIRECTV Settlement: Lying Pays

Attorney generals from 50 states piled onto a suit alleging that DIRECTV was deceiving its customers and hitting them with a variety of unethical charges. This month, the suit was settled and many of those attorney generals issued press releases trumpeting the case. But a closer look at the facts suggest that DIRECTV got off easy. Here's what the company was charged with, according to Missouri's state attorney general Chris Koster. DIRECTV:

• Did not clearly disclose the price the consumer would be charged and the length of time the consumer would be required to keep DIRECTV services;
• Did not clearly disclose the limitations on getting a certain price for DIRECTV;
• Enrolled consumers in additional contracts or contract terms without clearly disclosing the terms of the contract;
• Enrolled consumers in additional contracts when replacing defective equipment;
• Did not clearly disclose that seasonal sports packages would automatically be renewed; and
• Offered cash back to consumers but actually provided bill credits.

After years of making millions from its deceptive advertising practices, DIRECTV only had to pay $13.25 million to settle the suit -- an amount so low that it appears not to include a significant punitive element and probably means that the company is still coming out ahead in terms of the profits generated. 

Oh, and one other thing: DIRECTV did not acknowledge any wrongdoing in the episode. "It was important that we resolve these issues because we are a high-integrity company and we value our customer-service reputation," said the company's CEO Mike White. "And frankly, we wanted to get this matter behind us." Excuse, Mr. White, but if your company was "high-integrity" it wouldn't have gotten sued by every state attorney general in the country. This is yet another case in which a company effectively swindled millions of dollars from consumers -- stealing, let's just call it -- and not a single individual executive was held responsible or even had to apologize. Moreover, the cost of the penalty will ultimately be paid by shareholders who did nothing wrong. And the message to other companies will be that even if they get caught for their deceptive practices they may still benefit. This is justice? 

Comments

[Zach]

So I don't have DIRECTV or any personal experience with them, I am just a DISH Network employee and customer. It doesn't surprise me after seeing post like this why DIRECTV has an F rating from the BBB. "Direct stands out for providing the worst customer service and some of the most deceptive advertising of any company we've seen in this field so far"-Washington State Attorney General Rob McKenna.