SEATTLE (AP) -- Dish Network Corp. will reimburse Washington state customers about $2 million for a surcharge officials called deceptive, but the satellite TV provider denied wrongdoing in the agreement announced Tuesday by the state attorney general's office.
The Colorado-based company also will give existing customers who were charged the fee cash credit or access to free programming and pay the state nearly $570,000.
Dish denies the fee was illegal or deceptive, saying the state raised its business tax and the company was informing customers why prices were going up by listing a "Washington surcharge" on bills.
"When the state burdens businesses operating in Washington — and indirectly, Washington consumers — with a tax hike, we believe that the state should allow businesses to truthfully communicate with their customers about the burdens imposed by the state," Stanton Dodge, Dish Network's general counsel, said in a statement.
Dodge said the company decided to settle with the state to avoid a court fight.
The TV provider charged its Washington customers a dollar fee between May and December 2012 to recoup costs for the higher business tax. The "Washington surcharge" listed on bills was not advertised in the total cost of TV packages, the attorney general's office said.
Dish didn't accurately advertise true sales prices because it listed the surcharge separately, Washington state Attorney General Bob Ferguson said. He said that's not fair to customers or competitors.
"That buck at a time can add up to millions of dollars," Ferguson said.
Ferguson added that Dish can recoup the business tax if it's included in the total sales price.
Complaints about the surcharge first surfaced from concerned customers who called the attorney general's office, Ferguson said.
Customers affected by the fee will get an automatic reimbursement on their bills. If they no longer subscribe to Dish, they will get a check in the mail.
But people will have to sign up to receive the $10 cash credit or the free programming package of either two free pay-per-view movies or a two-month subscription to the Epix movie channel.
The cash credit could total about $3 million, depending on how many customers sign up, Ferguson's office said.
This isn't the first time the state attorney general's office has investigated Dish.
In 2009, Washington and 45 other states scrutinized the TV provider for "deceptive" and "unfair" sales. The company agreed to pay $6 million to the states.