After flood of complaints, DIRECTV reaches settlement with Wash.

After flood of complaints, DIRECTV reaches settlement with Wash. »Play Video
After being sued by virtually every state in the country, DIRECTV has agreed to pay millions of dollars and improve its business practices. The landmark agreement means some current and former customers could get money back.

DIRECTV says the marketing and customer service changes were already in the works. But state investigators say the settlement is the direct result of thousands of complaints.

"DIRECTV is the most complained about business at the Attorney General's Office," said Senior Counsel Paula Selis of the Attorney General's Consumer Protection Division.

The strong words from the state are on behalf of thousands of consumers who've launched an avalanche of complaints against the satellite TV giant.

Jessica Twardzik filed her complaint after canceling her DIRECTV service due to continued lack of signal at her home in Snoqualmie. As soon as she canceled, she says she got hit with a fee.

"And about three days later, $458 came out of our checking account. They said that I had entered into a two-year contract and I had to pay for the service."

Selis says Twardzik's complaint reflected a pattern.

"They would get charged this early termination fee, not realizing that there was an early termination fee," she said.

The state Attorney General's Office also took aim at DIRECTV promotions, offering low rates, with a catch buried in very tiny print.

"That is next to impossible to read." Selis said. "And so people were signing up not realizing that this $29.99 price wasn't really what they were going to be billed for. They were going to be billed for roughly twice that."

Washington was the first of 48 states to sue DIRECTV one year ago, over a string of allegations. In the Washington state settlement alone, DIRECTV agrees to pay $1 million in legal costs and compensate consumers with unresolved complaints. Going forward, the company agrees to provide full, clear disclosure of all terms and conditions.

In a statement issued Tuesday, DIRECTV confirmed it reached agreements with all 50 states regarding the company's advertising, customer service, and third-party retailer policies.

"DIRECTV has worked hand-in-hand with the Attorneys General to formalize many of the customer improvements we have made over the past few years and are pleased to have come to this agreement," said Chairman and CEO Mike White. "DIRECTV is committed to always operating with the highest standards of integrity and will move forward with continued dedication to providing the best video experience possible for our customers."

The company insists the issues raised in the complaints, lawsuits and settlements represent fewer than 1 percent of its 19 million customer base and most customers are extremely happy.

Washington state's agreement will be filed in court on Dec. 16. The consumer dispute resolution portion of the agreement will take effect starting Jan.1, 2011 at which time customers with unresolved disputes over DIRECTV practices will be given details on how to proceed

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Washington Attorney General's $1 million DIRECTV settlement sends clear signal