By Jenna Greene, From The National Law Journal

Seeking refunds for millions of consumers, the Federal Trade Commission on Wednesday sued DirecTV for false advertising, alleging that the satellite television provider misrepresented the true cost of its service.

“Companies can’t hide important information from consumers to trick them into buying goods and services, and that’s what we allege DirecTV did,” FTC Bureau of Consumer Protection head Jessica Rich said in a conference call with reporters.

The FTC filed suit in San Francisco federal court, charging that DirecTV violated Section 5 of the FTC Act as well as the Restore Online Shoppers’ Confidence Act. The FTC said the company lured consumers by advertising satellite TV service for $19.95 a month without clearly disclosing that the price jumps another $25 to $45 a month in the second year of the contract. If consumers tried to cancel, they faced early termination fees of up to $480, according to the FTC.

The FTC said the company also didn’t explain that after three months of free premium channels such as HBO, consumers had to contact DirecTV before the trial period ended to avoid being charged.

The FTC is seeking consumer refunds that Rich estimated will total “many millions of dollars.”

A DirecTV spokesman disputed the allegations across the board. “The FTC’s decision is flat-out wrong and we will vigorously defend ourselves, for as long as it takes,” spokesman Darris Gringeri wrote in an email. “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. For us to do anything less just doesn’t make sense.”

DirecTV is represented by Clayton Friedman, Chad Hummel and Linda Goldstein of Manatt, Phelps & Phillips. Friedman was not immediately reached for comment.

The FTC’s complaint comes as the Justice Department and Federal Communications Commission weigh approval of the $49 billion merger between AT&T Inc. and DirecTV. Rich said the FTC case “has nothing to do with any evaluation of that merger.”

DOJ considers mergers on antitrust grounds, while the FCC evaluates whether the combination is in the public interest.

AT&T has also run afoul of the FTC of late. In October, the agency sued AT&T Mobility for allegedly misleading its smartphone customers by promising them unlimited data, only to throttle their data speeds if they used too much. That case is also pending in San Francisco federal court.

Photo: 805promo/iStockphoto.com

For more on this story go to: http://www.nationallawjournal.com/id=1202720297868/DirecTV-Duped-Consumers-Over-Monthly-Costs-FTC-Says-in-Suit-#ixzz3UB10DHAz