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FTC Targets DirecTV Over Advertised Discount Service

The satellite TV provider didn't adequately disclose pricing of a two-year contract, says complaint.

Reuters / Mike Blake

U.S. regulators on Wednesday filed a complaint against satellite television provider DirecTV for what they called deceptive advertising for a 12-month discounted service that did not make it clear consumers’ costs would later rise.

The Federal Trade Commission said that the nation’s largest provider of satellite TV services did not clearly disclose to customers that the discounted program required a two-year contract, and that prices could spike by as much as $45 per month in the second year.

Customers also were not clearly informed they could be charged a fee of up to $480 for canceling before the end of the two-year period, according to the complaint filed in the U.S. District Court for the Northern District of California in San Francisco.

“DirecTV sought to lock customers into longer and more expensive contracts and premium packages that were not adequately disclosed,” FTC Chairwoman Edith Ramirez said in a statement. “It’s a bedrock principle that the key terms of an offer to a consumer must be clear and conspicuous, not hidden in fine print.”

A spokesman for DirecTV said the charges are ‘flat-out wrong’ and that the company intends to vigorously fight them.

“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,” DirecTV spokesman Robert Mercer said by email.

The FTC is seeking a court order to stop DirecTV from the “allegedly illegal conduct,” and is also pursuing monetary compensation for affected customers of an undisclosed amount.

The company is already under review by the U.S. Justice Department and the Federal Communications Commission for a proposed $48 billion merger with telecommunications provider AT&T.

On its website, DirecTV describes itself as the world’s most popular video service, with 26.3 million customers in the U.S. and Latin America.

(Reporting by Elvina Nawaguna; Editing by Susan Heavey and Lisa Lambert)

This article originally appeared on Recode.net.