AG’s office alleged door-to-door salespeople misled customers
DES MOINES -- A Utah satellite TV company will offer to refund money or cancel contracts for more than 1,100 Iowans after the Iowa Attorney General’s Office accused it of violating the Iowa Consumer Fraud Act.
Xcite Satellite of Orem, Utah, used door-to-door salespeople to sell DirectTV and Viasat services. Iowa Attorney General Tom Miller alleged that Xcite violated the Iowa Door to Door Sales Act and other laws by misrepresenting its business and its services, failing to provide consumers with a three-day notice of right to cancel, improperly assessing early cancellation fees and other violations.
The company disputed the allegations but agreed to resolve the matter through an Assurance of Voluntary Compliance. The agreement will cover customers who purchased from XCite from May to July 2018. Under the terms of the agreement:
- Xcite will pay $40,000 to the state’s Consumer Education and Litigation Fund.
- More than 230 Iowans who complained or attempted to cancel their contracts will be eligible for a refund of a $400 early termination fee if they cancel, or will get the fee waived if they haven’t already paid. They will also receive a complete refund of all amounts paid under their contracts.
- More than 850 Iowans who didn’t complain or attempt to cancel before the settlement are eligible to cancel their contracts without paying termination fees.
- More than 240 customers who purchased a $7.99 a month warranty plan will get full refunds for the number of months they had the plan.
Xcite is indefinitely barred from selling telecommunications services in Iowa, although it can keep existing customers who decide not to cancel. Its owners, Jeremy Neves and Jay Taylor, are banned from new telecommunications and door-to-door business in Iowa for five years.
All Iowa customers of Xcite will receive an email and letter asking whether they want to cancel their contract. They have 14 days to opt out of the contract without penalty. Consumers must return all equipment to Xcite. Although all consumers will receive a postage-paid box into which they can place their equipment, consumers who may be unable to travel to a U.S. Post Office because of physical, age-related or financial barriers can arrange for free in-person pickup.
Consumers filed formal written complaints with the Iowa Attorney General’s Consumer Protection Division alleging that Xcite salespeople made several misrepresentations, such as:
- They were agents of other companies, including AT&T, Dish Network and CenturyLink.
- The customer’s residence was in a “red zone” where the customer’s current provider planned to raise rates.
- That its satellite dish would perform better than that of current provider, or was “weatherproof.”
- That a quoted price “would never change.”
- That customers could “get out” of the contract at any time, without clearly disclosing cancellation fees of up to $400.
- That customers had to cancel in 24 hours. (Iowa law is three business days).
The state also alleged that salespeople failed to disclose to customers that they had signed a two-year contract or that they were being charged technical fees and other charges. In some cases, customers complained that the fees were pulled from their bank accounts without their permission.
Xcite's website claimed that the company was local, but the address of its “Des Moines office” was an apartment unit rented by a salesman.
The Attorney General’s investigation showed that Xcite’s practices hurt older Iowans in particular, by making misleading and confusing claims. Most of the complaints to the Consumer Protection Division were from older Iowans. In one complaint, an elderly consumer reported that she returned home to find an Xcite salesman at her kitchen table with her husband, who still suffered the effects of a stroke and could “not remember or understand a lot of talking.”
Another consumer said: “I am a senior 75 years of age, and this whole incident has literally made me sick. … I feel that I was preyed upon and taken advantage of because of my age.”