The Federal Trade Commission (“FTC” or “the Commission”) has clearly subscribed to enforcing ROSCA recently. On Tuesday, the FTC filed a complaint against DIRECTV’s negative option program and contract pricing structure under Section 5 of the FTC Act and ROSCA.
In the complaint, the FTC alleged that DIRECTV required customers to agree to a mandatory 24-month contract to receive television programming; customers who canceled their subscriptions before 24 months were charged an early cancellation fee. Although the rates were set at a specific monthly charge for the first year of a 2-year customer agreement, in the second year of the agreement, the FTC alleged that DIRECTV would increase the monthly charges by 50-70% higher than customers paid in the first year. After the first year of the agreement, customers either had to pay significant cancellation fees or pay the higher monthly price.
Continue Reading FTC Dishes Out ROSCA Complaint with Focus on Disclosures