Consumers Get Shafted By Updated DirecTV Arbitration Provisions

Last year, AT&T, Inc. acquired DirecTV, creating the largest pay TV provider in the United States and the World.  AT&T provides TV services to over 26 million U.S. customers and over 19 million in Latin America.This year, as a team of highly paid lawyers undoubtedly reviewed the agreements and practices of the integrated companies, the DirecTV arbitration provision changed. Arbitration is an out of court alternative to resolve disputes, where an arbitrator hears the dispute and makes an often binding decision. Unsurprisingly, arbitration provisions have become a mere formality imposed on consumer services that is widely seen as pro-business and disadvantageous to consumers.

DirecTV Pays Arbitrations Costs If…

DIRECTV’s updated arbitration provision encompasses any past, present, or future disputes that a consumer may have with the company. Among the terms of the provision, DirecTV forces consumers to give up their right to organize and participate in a class action suit against the company, and in exchange DirecTV will happily pay arbitration costs. To add insult to injury, the updated provision includes a formula for the payment award in arbitration, which most likely caps any recovery at $10,000.  

The real concern, of course, is that DirecTV will control the arbitration process by selecting arbitrators that are literally hacks that derive a substantial portion of their livelihood arbitrating JUST for DirecTV. How fair a shot do you really think you will get under a rigged system like that!?

For the ambitious consumer who wishes to avoid arbitration altogether, their only other recourse is to bring an action in small claims court, where consumers pay their own legal fees and costs out of pocket.  And, the arbitration provision is unenforceable if “the law of your state” barred such class-arbitration waivers.While the small claims court limits vary by state, in Florida these actions are limited to a $5,000 cap!

One-Sided Provisions

Under DIRECTV’s updated one-sided provision, consumers are no doubt left between a rock and a hard place. Although this news is unsurprising, it is a reminder that more often than not consumers are given the (very) short end of the stick. “Buyer beware” as usual. Consumers must nevertheless remain informed and understand all of their options!