Remember Claims That Cord Cutting Was On The Ropes? It's Actually Worse Than Ever

DirecTV Faces RICO Class Action For Bungling Business Installs, Then Demanding $15,000 For Theft Of Service

from the thieves-and-liars dept

Thu, Aug 18th 2016 9:36am — Karl Bode

For several years now DirecTV (now owned by AT&T) has been the focus of a series of lawsuits focused on the NFL's Sunday Ticket exclusive arrangement. More specifically, the lawsuits have claimed that the exclusive arrangement violates antitrust law, resulting in a monopoly that charges often absurd prices to small businesses. Sports bars in particular have to shell out payments of up to $122,895 per year for NFL Sunday Ticket, while those same bars pay significantly less for Major League Baseball's comparable offering.

But a new lawsuit filed against DirecTV this week accuses the company of something notably different. Doneyda Perez, owner of Oneida's Beauty and Barber Salon in Garden Grove, has filed a RICO class action against DirecTV for intentionally selling businesses residential-class TV service, then hitting these customers with penalties of up to $15,000 several years later for failing to subscribe to business-class service. There's a lot to go through in this case, but before we start, it's at least worth pointing out that RICO class action cases are almost always ridiculous -- even if there does appear to be questionable behavior here.

Since at least 2013 customers have complained that DirecTV salesmen and installers visit what they clearly see are businesses, sell them residential TV service, and don't even mention that DirecTV offers anything else. Then, a few years later, "investigators" employed by DirecTV show up snooping around, without making it particularly clear who they are or what they're doing. This was documented in a different 2013 Dallas Morning News Story about the same practice:

"The man sitting at the counter at Zeke’s Kitchen restaurant in Garland is acting suspicious. He doesn’t want any food but takes a glass of water. He says he’s waiting on a friend, but no one shows up. He asks that the channel be changed on the restaurant TV. Then the man steps outside and begins taking pictures of the restaurant. When owner Brandon “Zeke” Roberson asks him what he’s doing, the man runs off. Roberson’s wife, Julie, thinks it’s suspicious enough that she makes a note of it on the restaurant office’s calendar: “Very strange acting man. Ran off when Brandon asked why he was taking pictures outside."

Only later do the businesses realize that the investigator works for DirecTV, which then demands huge payments for unpaid back bills from what are often small and struggling companies:

"The man is a fraud investigator for DirecTV, sent to find out if the Robersons are TV signal thieves. Did they sign up for a residential TV account but use it at their commercial establishment? In June, DirecTV cuts off the restaurant’s service. Then DirecTV’s collection lawyers notify the Robersons that they owe $15,000 in back bills. It’s the darkest day in the restaurant’s history. So much so that the couple have to close the place to catch their breath."

Their lawyers dig in only to find this is a pretty common occurrence nationwide, citing "hundreds" of similar occurrences -- something seemingly supported by this latest class action. While it's possible that poorly trained subcontracted installers are playing a role in not adequately informing businesses of their options (one installer admits as much), DirecTV consistently decides to pursue massive penalties anyway. And AT&T, which bought DirecTV for $69 billion last year, isn't exactly trying hard to make things right, informing the media this week that this is just an issue of "basic fairness":

"This is a matter of basic fairness for all of our customers,” AT&T said to FierceCable in a statement. “Businesses that are not paying commercial rates for programming are taking unfair advantage of neighboring businesses that do. We are confident these claims will be rejected."

So yes, it's just "basic fairness" to sell a business one class of service, then turn around and demand they need to shell out $15,000 because your salespeople and installers are at worst part of a plan to defraud paying consumers, and at best clueless about the product they're selling.

C-D-Cal-8-16-Cv-01440-1-0 (PDF)C-D-Cal-8-16-Cv-01440-1-0 (Text)

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Filed Under: business, class action, nfl sunday ticket, residential, rico, satellite tv, shakedown
Companies: at&t, directv

20 Comments

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Anonymous Coward, 18 Aug 2016 @ 9:47am

A friend of my had a single TV with directly TV installed in his pizza business, 3 months later and DTV demanded $4000. They had no interest in explanations or anything. He ended up hving to eat the cost.
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Anonymous Coward, 18 Aug 2016 @ 10:06am

Been there, done that. Used to work for a DirecTV sub-contractor as a tech/installer. When we would show up to do the install and it was a business, we were supposed to call in to have it changed to a business install. This meant a reschedule and having to return another day. It also meant we wouldn't get paid for the job since it wasn't completed.

Did I mention installers were given rewards for turning in fraudulent accounts?
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Anonymous Coward, 18 Aug 2016 @ 10:17am

"This is about fairness..." It's not fair that we can't charge some people more for using the same service.
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That One Guy (profile), 18 Aug 2016 @ 10:20am

Reminds me of a Dilbert cartoon
"We don't ask you to act illegally, but it's pretty much the only way to reach quota. Okay, that's it for training. Any question?"
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That One Guy (profile), 18 Aug 2016 @ 10:28am

"This is about fairness..."
"... it's only fair that we get to continue to hose people over with practices that are at best indications of gross incompetence, since that incompetence works out quite nicely in our favor."

If they actually cared about 'fairness' they'd visit the businesses not to shake them down but to tell them that a mistake has been made, and if they want to continue to use their service they'll need to upgrade, not act as though the businesses are at fault for mistakes(or 'mistakes') the people who installed and sold the service made and charging them for those mistakes/'mistakes'.
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Bergman (profile), 18 Aug 2016 @ 10:32am

Re:
If the TV was in the manager's officer for personal use, then they had no legitimate claim against him.

If the salesman who sold him the TV package saw the place it would be installed and only offered residential service anyway, then your friend could join the class action.

Yet another reason to live in a one-party state -- so you don't need to get permission from shady salesmen to record their sales pitch for use in court later.
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Anonymous Coward, 18 Aug 2016 @ 11:04am

Re: Reminds me of a Dilbert cartoon
"Yeah. Why are you stealing from the starving artists?"
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Bob, 18 Aug 2016 @ 11:30am

Re: Re:
Switched my business to an Asterisk system. All calls are recorded. Yeah one-party State!
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anoymous, 18 Aug 2016 @ 11:43am

Re: Re:
if the salesman sold them a residential plan for a business, then its HIS mistake and not the customer. this is nothing but extortion. hope they sue those greedy dtv scumbags and win!!!!!
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Anonymous Coward, 18 Aug 2016 @ 11:43am

Anyone knowingly using AT&T, or the services of any of their subsidiaries, deserves what ever comes to fruition.
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Yakko Warner (profile), 18 Aug 2016 @ 12:10pm

Re:
Yeah, they'd be much better off signing up with one of their many competi-- um....
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tom (profile), 18 Aug 2016 @ 12:32pm

If the business in question has the original paperwork for the install and it shows their proper business address and an approved work order for a residential install, don't see how DirectTV is going to make their case. DirectTV probably hopes that that most businesses will pay up and not fight. Which kinda supports the RICO claim. (Pay us our protection money or the TV service gets it)
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Anonymous Coward, 18 Aug 2016 @ 1:20pm

Re:
Doesn't really matter - like many protection rackets - the 'settlement' is set such that it's a lose-lose no matter what. It simply costs too much to fight it that the cheaper, less risky option is to pay up.

Also, it's not DirectTV directly, but a third party that ends up pursuing (at DirectTV's behest) essentially acting as a collections agent. DirecTV itself will ignore you.
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art guerrilla (profile), 18 Aug 2016 @ 1:21pm

from the : get off my lawn dept...
...do stoopid glass teats HAVE TO be in just about every restaurant ?
isnt that why dog almighty made take out ?
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Anonymous Coward, 18 Aug 2016 @ 2:33pm

It's basic bait+switch.
The business cost is WAY more than you'd EVER recover in increase drink/food sales.

So they sell you residential, calculations show that SEEMS to be recoverable year on year.

Then they try to hit you with the business rates that you would have turned down flat originally.

This was designed on purpose by DirecTV. AT&T KNOWS it's going on, and actively not only condones, but trains their staff how to 'get one over' on businesses this way, threatening salespeople with their jobs if they don't meet business-as-residential quotas.
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Anonymous Coward, 18 Aug 2016 @ 3:39pm

Re: from the : get off my lawn dept...
...do stoopid self-righteous douchebags have to be online?
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PRMan (profile), 18 Aug 2016 @ 5:07pm

Re:
I switched to Dish the very day that I learned that the merger was inevitable.
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Glenn, 19 Aug 2016 @ 3:48am

DirecTV has door-to-door salesmen?
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Anonymous Coward, 19 Aug 2016 @ 6:14am

DirecTV became the world's first copyright troll nearly 2 decades ago when the company demanded ransom (from being sued) from thousands of US resident who had ever bought a smartcard reader, a device which has many legitimate purposes other than decoding DirecTV's broadcast.
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John Smith, 19 Jul 2018 @ 2:22pm

So basically all abuses of power are enabled by low-level grunts who are afraid of losing their jobs.

There are whistleblowers out there who never let that fear stop them. Many have faced pushback from these I-need-my-job cowards, who are about on par with communist citizens who snitched out their neighbors to win favor with Stasi.
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