Attorney General forces DISH to come clean about roughly $2M in deceptive surcharges, payments could total up to $5M
SEATTLE — After receiving consumer complaints the Attorney General’s Office began an investigation that led to resolution of alleged violations of the Consumer Protection Act by DISH Network.
DISH agrees to:
• Refund approximately $2 million to Washington state consumers;
• Provide additional benefits to consumers that could total up to $3 million; and
• Pay the AGO $569,500 for costs and fees.
The AGO alleged DISH began charging its Washington state consumers an unlawful monthly line-item surcharge in May of 2012, collecting more than $2 million in surcharges.
Hundreds of thousands of Washington consumers were illegally charged a dollar per month for up to eight months.
Headquartered in Colorado, DISH sells and distributes digital entertainment programming via satellite to residential and commercial subscribers in all 50 states, including Washington. From May through December of 2012, DISH charged consumers a “WA State Surcharge” or “WA Surcharge” ranging from $1.00 to $1.09—stopping only after the AGO began an investigation.
“DISH’s actions cost hard-working Washingtonians millions of dollars, one buck at a time,” said Attorney General Bob Ferguson. “The Attorney General’s Office will prosecute any company that tries to make a buck through deceptive billing.”
Consumers to receive a full refund
Consumers will get a full refund of the surcharge they paid, regardless of whether they are still DISH customers.
Consumers do not need to do anything to get their refund—it will be issued as a bill credit for current customers or a check to former customers who paid the surcharge.
DISH will contact all eligible consumers via mail or email.
DISH will also pay the AGO $569,500 for costs and attorneys’ fees.
In addition, residential subscribers who paid the surcharge, and who are still DISH customers, will get to choose one of the following benefits:
1. A ten dollar credit applied to their monthly bill;
2. Two free pay-per-view movies; or
3. Two months of free access to Epix movie channel (if they are not already subscribed to Epix).
Commercial subscribers, such as bars or restaurants, who paid the surcharge and are still DISH customers and who file a claim will receive a $10 bill credit.
Depending on the number of consumers who file a claim, DISH could provide about $3 million in additional benefits to Washington consumers.
How to claim the benefit
While no action is needed to receive the refund, affected consumers must submit a claim form to choose and receive their additional benefit.
DISH is developing a web page, click here, where consumers will be able to submit claims forms. The web page goes live on April 25, 2014.
Consumers wishing to claim their benefits under this settlement must submit a claim form and choose their benefit by Aug. 17, 2014.
Background on DISH deceptive surcharge
DISH implemented the illegal surcharge as a line-item on consumers’ bills, separate from the line-item for DISH’s monthly programming service fee. DISH implemented the surcharge to recoup its increased business and occupation (B&O) tax liability. Unlike the sales tax, the B&O tax is considered a cost of doing business in Washington state, and businesses may not tack it on as a line-item charge in addition to the sales price.
The AGO alleges that DISH misrepresented the nature of the surcharge to consumers, creating the impression it was a government-imposed fee. This gave Washington consumers the false impression that DISH’s prices were lower than they really were, making it harder for consumers to shop for the best price.
For example, DISH deceptively advertised one of their programming packages for $59.99, but charged consumers $60.99 with the “Washington surcharge.” This gave them an unfair advantage over other providers who lawfully advertised their monthly service prices.
This is not the first time the AGO has investigated DISH for deceptive practices. In 2009, DISH settled allegations by Washington and 45 other states, including allegations that DISH failed to adequately disclose to consumers conditions of its service agreements. The 2009 settlement included a commitment by DISH to not engage in any unfair or deceptive practices, a commitment the AGO alleges DISH broke with its recent deceptive surcharge.
A copy of the Consent Decree can be found here.