Television industry giant DIRECTV (NASDAQ:DTV) is facing legal problems in United Stated as the government has decided to sue the company for deceptive ads. According to reports, the Federal Trade Commission of United States filed a lawsuit against DirecTV on Wednesday in California federal court. FTC alleged the company for getting engaged in deceptive advertisements.
Root Cause of This Law Suit:
While filing its complaint in California Federal Court, FTC stated that DirecTV didn’t disclose the fact to its customers that they would be charged more after expiration of TV offers and promotional period. The company could notify all the customers through advertisements or directly on its website, but it failed to do so. DirecTV defended its side when reporters tried to get in touch with the spokesperson of the company.
As per an email sent by a DIRECTV (NASDAQ:DTV) spokesperson, the allegations of FTC are completely wrong and baseless, and DirecTV will continue to defend itself, no matter what and how much it takes. DirecTV always tries to make sure that all of its customers are informed about the latest offers, information, notifications, and charges. Hiding any information from customers doesn’t make any sense for the company.
FTC stated that DirecTV didn’t inform its customers that those who sign for a free trial period of three months ShowTime and HBO channel pack would be charged automatically once the promotion period ends. In order to avoid any payment, customers would need to cancel this offer before the promotion period ends. A lot of customers would sign up for this offer in temptation of getting free channels, but would end-up paying for the same without their knowledge.
The terms of any promotional offer should be disclosed to customers in any situation. It will be great to see how federal court responds to this issue and take a final call.