KANSAS CITY, Mo. -- DirecTV is the largest provider of satellite television services in the United States, but the feds say it's duping customers into paying more than they bargained for with misleading advertising.
According to a lawsuit filed by the Federal Trade Commission, DirecTV lures in customers by deceptively advertising a 12-month programming package, failing to disclose that a two-year contract is required. It's in the second year that customers' rates will increase by as much as $45 a month. Those who try and cancel early can get hit with a $480 fee.
That's just one of several deceptive ads outlined in the federal lawsuit. The FTC also criticized DirecTV for offering "free" premium channels for three months, but failing to tell customers that if they don't cancel after the three months has passed, they will be automatically charged.
The federal lawsuit says key terms of any special offer must be "clear and conspicuous, not hidden in fine print."
DirecTV has 20 million subscribers in the United States. The feds say many of those customers have been affected by DirecTV's deceptive marketing.
DirecTV denies the Feds accusations, calling them "Flat out wrong." A spokesman for DirecTV said the company will vigorously defend itself and has gone to great lengths to make sure its charges are clear and that its advertising is accurate and transparent.
However, if the federal government wins its case, DirecTV could be forced to return millions of dollars to its customers and former customers.