Alleged satellite TV sign-up scam: Dish, DirecTV and me

By Meg James

2:51 PM PST, December 6, 2013


It seemed too good to be true.

About a month ago, I was outside our house in Los Angeles watering plants as darkness settled in. Two guys approached me with a question.

Who provided my television service? Was it DirecTV? Dish Network? Time Warner Cable?

The pair promised that no matter which company it was, they could offer a better deal. As they walked up our driveway, I got a closer look. One guy was wearing a red polo shirt with Dish Network logos and a red Dish Network ball cap. The other guy was in a blue polo shirt and blue ball cap sporting DirecTV logos.

I said I was a DirecTV customer. The guy wearing the blue DirecTV shirt retreated a few steps while the red-shirted Dish-logo guy stepped forward.

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How long had I had my DirecTV service? he asked. My husband came outside and joined the conversation. The red-shirted guy said that if we were to cancel DirecTV and switch to Dish we could save as much as $700 a year.

He opened up a looseleaf notebook to show a breakdown of the deal Dish Network could offer compared with DirecTV. The laminated page contained side-by-side comparisons, listing monthly costs and benefits of switching to Dish. And with Dish, the guy said, we would have new DVRs with the capacity to record more network TV shows at same time than DirecTV offers.

This week, DirecTV sued Dish One Satellite, a limited liability company based in Provo, Utah, that is an authorized Dish Network retailer. The 51-page lawsuit, filed in U.S. District Court in Sacramento, alleges an "illegal pattern of racketeering activity," copyright infringement, false advertising and conspiracy to commit fraud.

"To gain an unfair commercial advantage at DirecTV's expense, defendants have engaged in a pattern of racketeering activity and a systematic campaign whereby its employees approach existing DirecTV customers, claiming to be employees and/or authorized independent retailers of DirecTV," the DirecTV lawsuit says.

"After falsely telling these customers that they are associated with DirecTV, that DirecTV and Dish Network are now the same company ... [they] attempt to persuade the DirecTV customers to switch their television service from DirecTV to Dish Network," the suit said.

Dish Network, which acquired a majority stake in Dish One in August, declined to comment Friday on the situation beyond this statement: "We maintain high standards of integrity for ourselves in our interactions with customers, and expect our retailers to do the same."

ON LOCATION: Where the cameras roll

Michael Hammond, who is identified in the lawsuit as the chief executive of Dish One, did not immediately return a call to his office in Utah for comment on Friday.

Because I am a reporter (who covers the business of television), I was skeptical of the tag-team tactics of the two men who showed up at our house. That night, I asked the pair why DirecTV would hire a company that actively recruited people to drop its service? It made no sense, particularly because DirecTV places such a high priority on customer retention.

The two guys explained that when they found Dish customers, the salesman offering DirecTV service would try to switch them over to DirecTV by offering them a better deal than with Dish. They said the company that employed them was in the business of recruiting subscribers for both DirecTV and Dish.

That didn't make much sense either.

We told the two guys we would think about it, and they promised to return the following evening. I promptly called DirecTV and talked to a customer service representative in Tennessee.  We reported the incident, including the red-shirted guy's claim that we could save $700 a year by switching to Dish.

The DirecTV representative offered us a discount to our monthly bill if we stayed on with DirecTV and signed another two-year contract, which we did.

The following night, the two guys returned to our house. My husband declined their offer to switch our home service to Dish, but he asked the blue-shirted guy (the one wearing the DirecTV logos) whether he could switch his TV service at his office to DirecTV from Dish. 

Funny, they weren't too interested in doing that.


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Twitter: @MegJamesLAT