Feds order Sony to give Playstation Vita refunds

Sony has agreed to hand out refunds to people who bought the PlayStation Vita handheld video game console to settle charges that its ads about the “game-changing” features of the devices were misleading.

According to the Federal Trade Commission (FTC), the video game giant advertised that its $250 pocket-sized console offered landmark “cross-platform gaming,” such as the ability to pause a game on a PlayStation 3 and pick it up on the PS Vita. In actuality, that feature was only available on a handful of games, and only if a customer bought two versions of the same game — one for each system.

{mosads}The FTC also alleged that Sony’s ads indicated that users buying a more expensive version of the PS Vita could play live, multi-player games through the Internet. In fact, that option was not possible.

In a statement announcing the settlement on Tuesday, the FTC said the deal should put other companies on notice not to oversell their products in advertisements ahead of the holiday shopping season.

“As we enter the year’s biggest shopping period, companies need to be reminded that if they make product promises to consumers — as Sony did with the ‘game-changing’ features of its PS Vita — they must deliver on those pledges,” Jessica Rich, the head of the of the FTC’s Consumer Protection Bureau, said in a statement.

Under the terms of the agreement, Sony will offer a $25 cash refund or a $50 credit to people who bought the PS Vita before June 1, 2012.

The FTC did not give a precise estimate for how much money Sony would pay out, but regional director Tom Dahdouh predicted that “hundreds of thousands” of people would seek refunds, leading to a total payment “in the millions” of dollars

In a related announcement, the FTC also charged advertising company Deutsch LA for ads that it produced about the PS Vita. Ad agency officials used the term “#gamechanger” on Twitter in order to increase the visibility of the gaming console but never disclosed that they were written by employees and not actual consumers, the FTC said.

The charges are the first time the FTC has ever accused a company of organizing promotion on Twitter without disclosing that it is a marketing campaign.

The focus on Twitter other social media “will only grow” as the websites become a more central aspect of people’s lives, Dahdouh said.

In addition to the refunds, both Sony and Deutsch LA have agreed to prohibitions against making similar misrepresentations in the future.

— This story was updated at 1:28 p.m.