DirecTV: New 2-Year Contract With $480 Cancellation Fee For Switching DVRs

I’ve had DirecTV for 8 years and was happy until 2 weeks ago. I purchased a new HD receiver at Best Buy on a whim to upgrade my sturdy old DirecTivo. I got home and called DirecTV to tell them of the switch. The Rep (Mone ID#413435) took the numbers on the new box and TV and told me that my new HD receiver should start working in a few minutes. That’s all she said.

I really missed the DVR functionality so I called 3 days later and asked DirecTV if I could change back and return the receiver to Best Buy. I was told that by activating the receiver I had agreed to a new 2 year commitment (even-though it isn’t on the box, in the manuals, on the receipt or clear in the TOS on the website) I had already committed and used up my commitment to an HD plan for my primary TV and DirecTV box. I was gobsmacked, and was told that if I canceled I had to return my boxes and pay $480 as a cancellation fee. When I signed up it was a 1 year commitment and $12.50 per month to cancel.

The kicker is that I just got notice that all the prices will be going up, so I canceled HBO because it is going up from 13 to 14 a month. DirecTV has now charged me $10 to cancel HBO!

I’ve emailed the BBB, and Chase Carey, to no avail. Does the mighty Consumerist have any ideas as to how I can deal with DirecTV?

Yikes. This is just the sort of behavior that recently backfired on the cellphone companies. We’d ordinarily suggest the EECB. Since you’ve already tried it, why don’t you give the CEO a call? We’ve heard from readers who did just that and had success.

In your best professional business-guy voice, call Mr. Carey’s office and calmly explain the issue. You’ve been a happy customer for 8 years, you should be able to get someone to fix this.

Any other ideas for Daniel?

(Photo:cmorran123)

Comments

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  1. EricaKane says:

    yeah DIRECTV’s HDTV policies are abhorrent. Anytime you active any item considered “advanced” they sign you up for a contract! Fun isn’t it.

    Whats funny was that DIRECTV used to be about no contracts etc. Now its just a sham.

  2. InThrees says:

    You also have a contract with me stating that if you write the consumerist to tell them about your DirectTV issues, you will owe me $4000 and a back rub.

    I decided that last month, and clearly I am not legally obligated to tell you about it – you are still bound by those terms, regardless of whether or not you knew or suspected you were entering into a contract. (Or didn’t know at all.)

    In fact, I have just decided that DirectTV owes me 1.21 Jiggamillions of dollars contractually.

    See where I’m going with this? Tell them that you didn’t know they were starting a new contract, that you didn’t sign anything agreeing to a new contract and that you were never told about a new contract, therefore you are not bound by the terms of this contract.

    If they send it to collections you can sue them for fraudulently trying to collect a debt that you do not owe. (IANAL but the fair debt and collections act provides for this.)

  3. EricaKane says:

    DIRECTV has a price cutoff that is considered “subsidizied” and for advanced equipment like HDTV, any sale of a unit under that price is considered subsidizied and therefore basically an “instant rebate” I’m guessing Best Buy didn’t really tell you that thought. Its a complete sham.

  4. BlondeGrlz says:

    This is kind of funny. I just switched my Dish receiver to an DishHD receiver and every single CSR I spoke to mentioned at least 3 times that I was agreeing to a 2 year extension on my contract. One of them even said “if the installer doesn’t get everything right and you’re unhappy, DON’T SIGN ANYTHING because you’re stuck.”

    p.s. I’m not saying this is Daniels fault so don’t yell at me.

  5. RAREBREED says:

    Isn’t there a 7 day grace period on all contractual financial commitments???? That’s why cell phone companies let you know you can cancel within 7 days, and if you return the phone you only have to pay the re-stocking fee and the pro-rated charges…

  6. Boberto says:

    My $32 Radio Shack antenna gets 34 station, 16 of them in HD. ALL FREE.

    Screw pay for television. They’re treating you like a heroin addict jones’n for a fix.

    If enough of us take this course, we eliminate this nonsense.

  7. StinkyCat says:

    I think many consumers on this site write their sob tales and conveniently forget the details of the situation to makeit sound so nefarious. I have DirectTc HD with a DVR box….andit is expensive as fuckinghell…

    $299 for the box.
    2 year contact.
    $9/month for HD service
    $5.month for DVR service
    $5.month per box in the house
    $55 for srtandard

    that all being said there is NO WAY that you can go thrugh the entire process of signing up withut being told you are under contract.

  8. StinkyCat says:

    @boberto:
    just becasue you are getting an HD channel doesn;t mean you are veiwing it in high def.

  9. PølάrβǽЯ says:

    Tell them to produce the contract you signed. If they can’t, and still won’t let you switch boxes, take them to small claims.

  10. jimconsumer says:

    Get ahold of the highest level supervisor you can, or launch an EECB, and get right to this point: “You either return my service to what I had previously, right now, at no cost, or cancel it completely. Either way, I will NOT be paying any cancellation fees whatsoever. Period. I signed no such contract with you, I will not be paying for it, and if you try to collect I will report you to the proper authorities.”

    If they don’t budge, just cancel your service and shred any bills they send you without opening them. Seriously, don’t let these people push you around. Nobody has any right to your money just because they claim you owe it – just refuse to pay. The only way they can force the money out of you is to sue you, and they’re not going to do that because they do not have your signature on any contract. The worst thing they will do is send it to collections, at which point you write the collection agency a nice letter saying you don’t owe the money and, by the way, if they continue trying to collect you’re going to sue their ass. They’ll back right off (and if they don’t, call a lawyer, you’ll own yourself a nice little collection agency real quick).

    I have a friend who can’t even be bothered to cancel his phone or cable service, when he got tired of them he just quit paying the bill. They didn’t do a thing. People do this all the time and they never get their money out of them. They’re not going to get it from you, either.

  11. @jimconsumer: wow jim!! what enthusiasm you have! too bad that what you suggested will probably not work as easy as you think. the csrs/collections agencies will ignore your threats and your credit report will eventually be dinged. i would suggest to the op to get everything straightened out as soon as possible. and get written/emailed/faxed receipts for each transaction — do not rely on phone conversations.

  12. DogStarMan says:

    Something similar happened to me. I was a happy DirecTV customer for 4 years. My Tivo (that I owned and paid a maintenance agreement on each month) crapped out on me. I called them to let them know and they said they’d replace it. So, several months later, we decided to go with cable instead of DirecTV, because they could offer phone and Internet all bundled for about 40 bucks cheaper a month than we were paying. I called DirecTV to cancel and was told that I owed an early cancellation fee because I had re-signed up for a two year contract. You see where I’m going with this…when they replaced my DVR, they automatically signed me up for a two year contract. I went round and round with them and finally got them to say that they would charge me for the early cancellation fee on my last bill and then a credit on the same bill, so I wouldn’t be charged for it. Well, I waited for my last bill to arrive in the mail, but instead of a final bill, my checking account got drained one day. Seems that since I made a web payment once, they had my bank card info on file. Their policy is that if they have that info, they take the last payment directly from that source without even asking. Plus, they didn’t credit me like they said they would. So my checking account was emptied and I had checks out to other people. Fortunately, I busted a move on them and got them to put the money back, but I did incurr one overdraft. I pursed getting reimbursed for that, but I finally gave up. It was too much hassle.

    So, I started off loving DirecTV and after all of that, I despise them. I really wish I could suggest people use them, but not after what I went through. Time Warner isn’t much better, but it is cheaper. The lesser of two evils I guess.

  13. ogremustcrush says:

    I live in a dorm right now, and am planning to move out to an apartment soon. The options for TV are Time Warner and satellite. I’m not going to get either though, since all the prices and policies are abhorrent. Nearly everything I watch I can get on the internet for free, so thats what I’ll do. Now if only there was faster internet here that isn’t Time Warner (I’m probably going to get Verizon DSL).

  14. Greeper says:

    I’d call back. I am a longtime DirectTv customer and had an issue with them and getting incorrect info from a rep. I was polite, asked to talk to someone in charge, and the woman went WAYYYYY overboard apologizing, making it right, issuing credits, giving me her direct line for future problems. Also, DTV apparently has special agents to deal with long-timers, so make sure if you ever moved the 2 accounts are “tied” so they know how long you’ve been with them. Who knows, maybe they’ll be jerks, but my experience was pretty good once I got the right person (politeness + insistence = results).

  15. whydidnt says:

    What a world huh? I agree that DirecTV has gone overboard with this whole new 2 year commitment simply for sneezing. DTV used to be a very nice, consumer friendly alternative to Comcast. Now you get your choice, crappy, unreliable service at HIGH prices or crappy, you must stay with us for life service at almost as high prices!

    The sad thing is they already charge a premium up-front for the HD boxes, then they turn around and say you have to stay with them another 2 years. What’s interesting is the $ amount in question. I always thought the ETF was $200.00, but $480, yikes!

    What also sucks is that they seem to get to extend this contract even though they really haven’t done anything to re-invest in you as a customer. It’s not like you have a choice to buy a non-subsidized receiver in lieu of a new 2 year commitment.

    I think in this case I’d escalate to the CEO and say, look, I’ve been paying you for 8 years, if you want to collect another 8 years worth of monthly fees, you’ll cut me some slack on this termination fee. You’re going to lose a lot more than $480 if you lose me as a customer. The ETF’s are in place because Wall-Street responds quite negatively to falling subscriber numbers, even if the bottom line income is good. The fee is put in place to scare people into staying. In your case, your staying, they just want to extort some extra $ out of you.

  16. nightshadowon says:

    @aaron8301: I’m with you. I always thought contracts were something signed by 2 competent parties.

    BTW, if you read this you are obligated to do my dishes for 2 years. If you do not wish to do my dishes for 2 years you owe me $480 ETF.

  17. pestie says:

    They did this to me when I added a second DirecTivo to my account. However, the terms explained to me were “keep your service for 2 years, or pay a $200 ETF, or return the second DirecTivo unit.” Still, I wasn’t at all pleased that I’d been blindsided by a new contract. But that’s OK… I’m about to cancel DirecTV anyway. I just finished building an all-digital MythTV DVR!

  18. Cratin says:

    Hey, this happened to me as well. Al I did was have them send me a DVR to hook up and they extended my contract for 2 more years. They never once said anything about extending my contract. The woman on the phone just told me the price and that was that. I emailed Chase Carey and was contacted by the executive customer service lady. She basically said that they were sorry that it was “miscommunicated” to me, and when I informed her that it was “never communicated” to me, she did nothing. So, I waited 3 more months and paid the $160 I had left on my contract to switch to Verizon Fios. That was also after DirecTV had sent me 2 broken DVRs, charged me for a receiver I did not have, and tried to up my $12.50 per month ETF fee to $15 without notifying me. Those people are bastards!

  19. chrisbacke says:

    Great advice – here’s hoping I never have that problem…

    @Rarebreed – it’s not widely known, but in some cases there’s a 3 day recission / cooling off period by law.

    According to the Florida Attorney General’s Office, the three-day cooling-off period applies when:

    • You sign up for future services on a continuing basis.

    • You sign for future services that you can no longer physically receive or aren’t available anymore.

    • The sale is a result of a “home solicitation” taking place in your home or at a location that’s not the permanent place of business for that seller.

    (Taken from [www.news-press.com])

    IANAL, and this may only be the case in Florida. Try Googling “3 day cooling off period” and your state and see what comes up…

  20. gamerzworld says:

    DirectTV did something almost like this to me. DirectTV released an update for one of my receivers and it screwed up the firmware. My channels where going in and out on that receiver but my other receiver that didn’t get an update was showing the channels fine. I called DirecTV and told them the issue. They said no problem and they would send a box to give me a new receiver and collect the half dead one. Come a month later, I was looking at my bill and it said I had entered a new contract. I called DriecTV to find out why and they said I was entered into a new contract when they sent me the new receiver. I tried to get them to admit they put me on a new contract with out permission but they wouldn’t budge.

  21. oneswellfoop says:

    Small Claims Court.

  22. SadSam says:

    What happens if you were to go to court on this “new contract” or “contract extension” what would DirecTV or any of these other companies produce? What evidence would they have, do they keep back up tapes on all these calls?

    I’ve experienced similar “you agreed to X when you did Y” with Cingular, now AT&T. I’ve had an account with AT&T wireless, then Cingular and now AT&T for a zillion years and wanted to add a line for my husband so we just had one company to deal with (I also have BlackBerry service and DSL with AT&T). Well when we signed up my husband nothing was communicated about (1) extension of my contract for 2 years (which was fine since I didn’t plan to changed but there was no communication whatsoever) and (2) loss of all roll over minutes associated with my phone number (a bigger problem and again no communication whatsoever). I was able to get some of my roll over minutes back only b/c I had access to a corporate account customer service number through my company due to my BlackBerry service.

  23. Brad2723 says:

    Well, I had the same problem, and after 4 phone calls and an email to Mr. Carey, they removed my contract stipulation. Make sure you mention how long you’ve been a customer, and that you feel you are being treated unfairly by being locked into a contract. The low level CSR’s (1800-DIRECTV) are powerless to do anything for you. This needs to go to executive customer service.

  24. soulman901 says:

    DirecTV, if you so much as look at our Ad’s on TV, we’ll own you for life.

  25. Dawnrazor says:

    I avoid all this mess by eschewing cable and satellite in favor of a good old-fashioned antenna. I save money AND cut back drastically on the clutter entering my home (20-something channels of dreck/endless marketing over the air vs. hundreds via cable/satellite) and disrupting the peaceful, calm ambience we strive to maintain. I would respectfully submit that people in general need to get off the couch, get interested in a hobby/activity beyond spoon-fed passive “entertainment”, and begin to really LIVE life!! I simply cannot understand why people spend such insane amounts of money on high-end TV’s only to feed them the crap that is foisted upon us by the cable/satellite/entertainment companies (stupid amounts of money for cable/satellite, especially given the volume of commericals and frequency of reruns on cable/satellite channels). The amount of money many people spend on TV equipment/services (which lead them to overeat, drink/smoke too much, under-exercise, and sleep/waste away much of their free time) could instead be used to get a FABULOUS start in a new hobby/interest. Of course, such people could always save the money and simply play with the kids or volunteer their time for a cause they believe in (if not too numbed-out from all the TV). Screw the “entertainment” industry-when was the last time any of their “product” had any meaningful positive impact on our culture/country anyway ?!? I HOPE the prolonged strike DOES cause Hollywood as we know it to implode!!!

  26. jimconsumer says:

    @pepe the king prawn: You said, “the csrs/collections agencies will ignore your threats and your credit report will eventually be dinged.” My response:

    1. It is illegal for a collections agency to attempt to collect on a debt that they have been informed is not valid. DirecTV does NOT have a signature on a new 2 year contract, hence there is no contract, hence their cancellation fee is not valid. This fee will never hold up in a court of law and they will never be able to produce the appropriate paperwork to legally collect on it if you even remotely bother to challenge it.

    2. If the collections agency ignores you, they are in violation of the fair debt collections act, at which point it is easy to nail them to the wall and collect a settlement for your trouble.

    3. This is just a side note, but who gives a crap about your credit report? Are you all slaves to Equifax? If you don’t borrow money, you don’t need a credit score. Try paying for everything with cash from now on. It really is freedom. I could care less if some unethical company put on my credit report that I didn’t pay them their $480 extortion fee. Your credit score is only useful if you want to borrow money; if you never borrow money, you don’t need it. I have the freedom to tell DirecTV, or Cingular, or whomever else to fuck off, I’m not paying your ridiculous fee, see you later, and there’s not a darn thing they can do about it that matters to me. They can’t win a lawsuit over an undisclosed, verbal “contract” I never signed and hence, they can’t touch my money.

  27. tunaman says:

    Ebay my friends, Ebay. The Directv HD-DVR is available on there for ~$250 with no contract. I have one from there and not had any problems.

    If the unit is used, you just have to buy a new access card at $20.

  28. gopher1978 says:

    Give me the careys number. I want a long conversation with him myself

  29. ShadowFalls says:

    DirecTV can say what it wants about cable, at least cable doesn’t lock people into contracts with massive ETFs.

  30. firebird1o1 says:

    1. You dont have to sign a contract be be in a legal contract. What binds you to a contract is a.) paying your first month bill. b.) activating a $480 advanced reciever for the LEASE price of only $99.

    2.) Your problem should be with Best Buy, it was there responsibility to inform you about the contract.

    3.) In the USA you have 3 days to get out of ANY contract you sign.
    4.) What is Dtv going to do with a used HD reciever you change your mind about anyway? It is reasons JUST LIKE THIS that cause the bill to rise for the rest of us!

    NOTE: Yes, I am an independent retailer for Dtv, but that does not make me “PRO” Dtv. It lets me see both sides of the fence. It takes Dtv 4 years to make a profit from 1 customer, that is the reason for the 2 year contract. It is a better service for a better customer. If you have a issue with a service Dtv is more then willing to work with you, but the 1st person that picks up the Dtv is just a low level operator doing what the “script” is telling them. You just need to ask to speak to a supervisor. They WILL take care of you.

  31. Stanimal says:

    @Firebird101

    I hope you’re god at selling DTV, because your knowledge of contract law sucks.

    1) a contract, by definition must be agreed to by all parties, this includes entering voluntarily into the contract and agreeing to be bound by the terms. You can’t simply say “you bought a DVR, activated it, and paid your bill so you’re in a contract.” Although I do think that there was some small print that was probably not read on the box of the DVR, or was included in the packaging.

    2) Best buy is not a party to the contract, and has no responsibility to the purchaser

    3) This is just a blatantly false statement as evidenced by a quick search of the law. If you are telling your customers this in order to sell them products, you’re probably engaging in fraud

    Quite honestly, the fact that you get a check from selling DTV’s merchandise means you have a financial interest with them. You may see both sides of the fence, but one of those sides is your business partner.

  32. mthrndr says:

    This is why I go cable, as much as I’m annoyed by them too – I can cancel anytime I want. No contract.

  33. firebird1o1 says:

    @ stanimal URAFM. You DO have 3 days get get out of ANY contract.
    And yes I am very good @ selling Dtv. (over 600 last year). The reason I’m good at it is because I’m VERY honest with my customers, weather it cost me a sale or not. There is a reason Dtv won J.D. Power and Asso. award for the past 7 years straight. That is why I choose to sell this product. “Sell the best, service the rest”.
    It just makes you sound like a morron when you spout off what you “think” is law. Open a book.
    By the way.., Dtv=.32 cents per channel of 100% all digital.., TWC= .69 cent per channel for anolog. It seems like pretty simple math to me.
    Dtv= 87 HD channels (and counting) for $9.99.
    TWC= 8 Hd Channels for Free (4 more for another 8.99/mo).
    Dtv= 150 channels of 100% digital (+ locals) $49.99/mo reg price (no promo)
    TWC= 70 channels of anolog $56.99/mo (extended basic)
    The average US consumer spends $76/mo for TV service (for who ever the provider is). For only $69.99/mo with Dtv you can get All 200 channels with HD AND DVR service included! Any logical person would see that is by far the best value for you buck.
    This is not BS “sales guy” hype. These are the black and white facts. And please, before you or someone else wants to leave a BS rebuttal, and talk out of your ass, simply use your computer that look up the facts I just wrote.

  34. firebird1o1 says:

    Btw, Stanimal, Best Buy as an Autherized Agent, selling Dtv hardware and services ARE the ones responsibile to disclose the contract info.

  35. firebird1o1 says:

    Here is good exsample [cache.gizmodo.com] I just googled “Best Buy + Directv” , and it clearly states a contract is required. No one is trying “screw” anyone. You can but one out right if you want for $480., but for a 2 year comittment they will give you a Greatly reduced rate. A HDDVR will cost you $800 dollars to buy out-right, or $199 to lease.(only $99 for a new customer). And after the lease is over, the reciever is yous to keep!

  36. firebird1o1 says:
  37. DCcowboy says:

    I JUST got off the phone with DTV — the “President’s Office” regarding an early termination fee they say I owe them. I had been a customer since 2002 (primarily for the NFL package) and in November I decided to cut them loose. I finally tired of dealing with all their BS, faulty equipment, crummy technicians, crummy CSR’s, etc. I owned all my receivers up until a year ago when I called DTV and asked them as a long-time customer would they send me a HD receiver to replace one of my old standard definition receivers that I owned. The CSR said, “SURE!” They never mentioned by shipping me the new receiver I was agreeing to a new 2-yr commitment. The multiple CSR’s have repeated said that it MUST have been told to me because they are trained to let the customer know. I told them that may be the case, but it was never conveyed to me. I finally spoke to one of my friends who works in the govt affairs dept at DTV and he said he’d try to help. Well, that help came in the form of Theresa (employee #U2063) from the President’s office tonight. She and I were on the phone for 51 minutes going round and round about my problems with DTV, why I left, and why I felt the ETF was unwarranted. She basically said the charge was valid and it “stays.” I said whose decision is this? She said it was hers. I asked her if she has ever waived the ETF for anybody? She said, “Yes.” I asked what needed to be different about my situation to get her to agree to waive the fee. She said it just depends on the circumstances. I asked her if the thousands of dollars and over 5 yrs of service I had with DTV and numerous problems I had dealt with meant nothing to her? She said of course it does, but I said, “not enough for you to help me though, right?” I asked her to send the document that I signed saying I agreed to a new 2-yr commitment. She said no such document exists. I said okay so it’s basically your word against mine and that’s enough of a reason to pursue billing me for an ETF. She said yes. Unbelievable. My ETF was $275 but she said she’d “prorate” it for me so I ONLY owe $150. The $150 isn’t a big deal to me it’s the principal of the matter. They know they can do this and most people aren’t going to think it’s worth their time to fight it so they simply pay it and go on their way. I have to admit that this isn’t worth damaging my credit over and the thought of this going to a creditor does not make me happy.

  38. VanniRalla says:

    With the FCC hearing today (6/13) about unfair early cancellation fees of
    the cell phone industry.I wonder if any of this will affect DirectTV.

    Also, is there’s anyone who’s taken DirectTV to small claims court? How did
    that go?

  39. hansolo247 says:

    Consideration, Consent, and Capacity are required for any contract.

    Take this to small claims and you will win.

    Consideration is missing: If the box goes back, DirecTV has not offered you anything in exchange for the contract.

    Consent is clearly missing. Fortunately, the burden of proof is on DirecTV to provide it…and they can’t.

    Capacity just means you are of majority age and are not mentally disabled…I’m sure that is a lock.