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Read the fine print carefully if you sign up for satellite TV

Satellite TV companies often say they have better service, more channels and lower prices than cable. And with more than 32 million customers, they must be doing something right.

But the Better Business Bureau reports that tens of thousands of customers have serious gripes with their satellite providers, ranging from fine-print "gotchas" to outright lies. In the past three years, 39,000 complaints were filed with the BBB against industry leader DirecTV, while DISH Network amassed 13,000. And in recent months, government consumer protection agencies in two states have sued DirecTV.

Many of the complaints stemmed from high early termination fees: Some subscribers report having to pay more than $600 to cancel their service. That's at least twice the amount charged by wireless phone providers.

"Typically, the customer felt that the company didn't provide the service as promised, and they shouldn't have to pay to cancel service they weren't happy with or didn't receive," says BBB spokeswoman Alison Southwick. In some cases, customers contend they were never aware of the early cancellation penalty.

Other customers complain that after a low-rate introductory offer, their monthly fees rose more than expected. Or that they were billed for services they never ordered, or when they upgraded their service or equipment, an automatic contract extension resulted, along with early termination fees.

In July, the Miami-Dade Consumer Services Department in Florida filed a lawsuit against DirecTV alleging "false and misleading advertisements" and failure to properly disclose contract terms. Some 300 subscribers told the agency that they were billed about $20 more per month than package prices they signed up for and were charged for supposedly free equipment upgrades and installation.

That follows another lawsuit, by Washington Attorney General Rob McKenna, accusing DirecTV of "unconscionable" sales practices, including running ads touting low prices while hiding prospective fee hikes and planned rate changes. In 2009, DirecTV generated more consumer complaints than any other business in that state.

DirecTV official Darris Gringeri declined to comment directly on the lawsuits. "We are working to resolve the issues," he says. "We realize we don't get it right every single time, but the vast majority of our customers are extremely happy."

DISH Network spokeswoman Francie Bauer had a similar response: "We know there is always room for improvement. We appreciate the need to address customer concerns in an effective and timely manner, and we will continue to work with the BBB to respond to and resolve these issues as quickly as possible."

The Federal Communications Commission, which oversees satellite TV services, did not respond to a request for comment. But it reports that consumer complaints about both cable and satellite providers rose 9 percent in the first three months of 2010 compared with the first three months of 2009.

Here are some tips for avoiding trouble with satellite TV providers:

  • Get it all in writing. Always read everything carefully, and don't rely on advertisements or claims made by a salesman, installer or customer service rep. The BBB cautions about "complex policies and fees that are sometimes unique to satellite service" and acknowledges that many fees and price increases are outlined in the fine print of agreements.
  • Note offer limits and conditions. Tempted by a low-cost introductory period? Be sure to mark its end date on your calendar so you'll know when to cancel if dissatisfied. And if you plan an upgrade, ask if it will automatically extend your contract.
  • Check every bill closely. The sooner you detect billing inaccuracies, the better. If your account is set for automatic charges to your credit card or bank account, check its statements.

If you do find yourself with a complaint, first try the company itself; if it provides no resolution, notify the BBB. That group says that both DirecTV and DISH Network consistently respond to its complaints, often providing customer refunds.

Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.

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