El Segundo, Calif. - A California Superior Court judge Wednesday gave the green light for a class-action lawsuit to proceed against satellite-TV operator DirecTV for allegedly imposing early termination fees of up to $480 on customers who cancel their service before the end of their contract periods.
The lawsuit accuses DirecTV of not clearly disclosing upfront its cancellation terms and fees, alleging that the company would even go as far as charging a customer's bank account or credit card for the fees directly without the consumer's permission.
The complaint, which was originally filed in Los Angeles Superior Court in September 2008 by Los Angeles resident Kathy Grenier, alleges Grenier's checking account was dunned $240 without her permission after she canceled her DirecTV contract due to faulty equipment issues.
Grenier's suit was later joined with similar claims by California residents Amy Imburgia and Marlene Mecca.
The Imburgia case alleges DirecTV failed to disclose upfront its mandatory "terms of service," regarding the early cancellation fees, and the company would switch out or update equipment to automatically extend the contract length.
"This is a major step forward in our mission to obtain justice for California consumers cheated by DirecTV," stated Consumer Watchdog founder Harvey Rosenfield, who is one of the attorneys bringing the case to court.
"California consumers who continue to have their bank accounts plundered without their consent by DirecTV deserve their day in court, and the court's recent ruling will allow the plaintiffs to move forward with uncovering and exposing the extent of DirecTV's deceptive practices," Pamela Pressley, litigation director, said in a statement posted on the Consumer Watchdog web site.
Consumer Watchdog said the state case had been delayed while DirecTV sought a stay while similar federal cases against DirecTV, filed in both California and other states, were considered. Attorneys for the state case argued successfully that the federal cases had already been delayed by DirecTV and there was no reason for the state court to defer to the federal court at this juncture.
In a statement on the case, DirecTV said it "is already defending against these baseless allegations in federal district court. While this copycat lawsuit was filed later and will be proceeding concurrently with the federal litigation, neither of the lawsuits has any merit.
"We believe our early cancellation fees are lawful, fair and reasonable and all relevant terms and conditions of our customer agreements are carefully disclosed to each customer, including the customer's option to accept discounted or free equipment and an installation offer in exchange for their agreement to remain a customer for a period of time (24 months). Early cancellation fees are a common practice in the telecommunications industry, like providers of cellphone service, for example.
"If the customer chooses instead not to keep that commitment, there is a pro-rated cancellation fee. Customers are also informed that they're required to provide us with a credit or debit card when they activate their service and they agree that the credit card will be used for any unpaid balance when they disconnect the