DirecTV Charged By FTC For Alleged Deceptive Advertising

DirecTV has been charged by the Federal Trade Commission for alleged deceptive advertising. The FTC said the charge centers on DirecTV's discounted 12-month programming package, because it fails to clearly disclose that the package requires a two-year contract. In addition, the FTC said DirecTV does not clearly disclose that the cost of the package will increase by up to $45 per month in the second year, that early cancellation fees of up to $480 apply if the package is cancelled before the end of the two-year period and that consumers have to proactively cancel "free" premium channels offered for three months to avoid automatic charges. "DirecTV misled consumers about the cost of its satellite television services and cancellation fees," said FTC Chairwoman Edith Ramirez. "DIRECTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed." DirecTV's stock slipped 0.2% in midday trade. It has gained 2.4% in the past three months, while the S&P 500 has edged up 0.6%.