3 Firms Enjoined From Selling TV Decoders : Santa Ana Company and 2 in Covina Allegedly Marketed Boxes to Illegally Receive ON-TV

A judge Thursday prohibited three Southern California companies--one in Santa Ana and two in Covina--from selling illegal cable television decoders and from advertising the “black boxes” as legal, money-saving devices.

Orange County Superior Court Judge John C. Ryan imposed a preliminary injunction on Orange County Distributing of Santa Ana and the Covina firms New Video and Karate-Judo Center. The injunction is part of a continuing investigation by the Major Frauds and Consumer Protection Unit of the Orange County district attorney’s office.

The consumer protection unit began investigating the companies last May after advertisements appeared in which the companies hawked decoder boxes for the subscription cable service ON-TV.

When viewers subscribe to pay-television programming, the cable service rents them attachments for their TV sets. The attachments, usually boxes, allow viewers to have access to programming on pay frequencies and can be monitored and switched on and off by the cable companies that issue them.

The decoders under investigation are the same devices that ON-TV subscribers rent, but there is one difference: The boxes have been tampered with so they cannot be monitored by the companies. As a result, owners of the illegal devices do not have to pay subscription fees to watch the cable programming.

Selling or owning such devices is illegal under the California Business and Professions Code, said Gay Geiser-Sandoval, deputy district attorney.

“Advertisements indicated that the decoders were legal to own and that by owning one you could save the $40-a-month charge you would normally pay to ON-TV,” Geiser-Sandoval said in a telephone interview.

The companies sold the decoders for $179 each. Geiser-Sandoval said investigators have no idea how many devices were sold by the companies.

According to the injunction, the three companies must not sell the decoder boxes, must not advertise them and must not present them to the public as being legal.

In addition, the injunction requires the companies to give investigators lists of all the customers who purchased the devices by credit card and then to reimburse those people.

Investigators still do not know who is distributing the illegal devices, Geiser-Sandoval said, although similar scams have operated in Minneapolis and Washington. The consumer protection office filed a civil consumer fraud complaint against the companies last July and is seeking $250,000 in damages.

Ironically, consumers who have purchased the devices are in for a big surprise. Not only are the boxes illegal, but in upcoming months they will be useless.

“ON has been purchased by SelecTV, and the company will be installing new boxes for all of its legitimate customers,” Geiser-Sandoval said. “Once the new boxes are installed, they will change the frequencies on which their programs are aired. These devices will be useless soon.”

Spokesmen for the three companies and ON/SELECTV could not be reached for comment.