This week AT&T is now facing a third lawsuit claiming that it misled investors over the growth of DIRECTV NOW, now called AT&T TV NOW. Pomerantz LLP and Labaton Sucharow LLP now say their investigation found that the use of fake accounts to increase DIRECTV NOW subscribers numbers was a “massive and nationwide” issue.
According to the lawsuit:
AT&T Encouraged the Creation of Fake Customer Accounts to Perpetuate the Illusion of Brisk DirecTV Now Growth. The DirecTV Now’s subscriber numbers that Defendants publicly touted were false and artificially inflated. AT&T employees from across the country were strong-armed into creating fake DirecTV Now accounts, by utilizing various tactics to covertly add the product to customer’s AT&T accounts without their knowledge. For example, employees were taught and actively encouraged to convert activation fees that customers traditionally had to pay to upgrade their phones into DirecTV Now subscriptions by waiving the fee, but charging the customer anyway, and applying the payment to up to three DirecTV Now accounts using fake email addresses without telling the customer they had been signed up for the subscription. One former employee in Michigan estimated that around 40-50% of the customers he dealt with beginning in early 2017 complained of being billed for DirecTV Now which they told him they never signed up for. Another former employee in Hawaii stated that “at least half” of the DirecTV Now accounts were “bogus,” based on what he was seeing internally. Another former employee who fielded online customer complaints from across the country estimated that he was seeing between 20-40 complaints per week from customers being billed for DirecTV Now despite not signing up for an account.
This is similar to what reportedly happened in Hawaii and lead to several AT&T employees being laid off. According to employees who were recently fired, AT&T managers pushed sales staff at the store to create multiple accounts. When someone in a store would signup for DIRECTV NOW, sometimes as many as 5 accounts would be created. The practice was to cancel them after the sale was made so the employee could get a bonus commission but one current AT&T employee says that you should bank statements.
Pomerantz LLP and Labaton Sucharow LLP are asking for a class-action lawsuit to represent investors that were hurt when DIRECTV NOW’s subscriber numbers started to fall.
AT&T has in the past described other lawsuits like this as “baseless” and “wholly without merit.”
Cord Cutters News has reached out to AT&T for comment and will update our story as we learn more.
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