Introduction
The Attorney General of New York has filed a lawsuit against Sirius XM for satellite radio, accusing the company of enticing customers to subscribe to the service and training customer service agents to resist cancellation requests and “harass” customers until they agree to continue paying, thus joining a number of companies that have been sued for making it difficult to cancel subscriptions, accusations that Sirius XM has denied.
Key Facts
On Wednesday, the New York Attorney General’s office filed a lawsuit demanding that the entertainment company pay thousands of dollars in fines for each violation of state law regarding deceptive business practices, change its subscription cancellation policies, and refund any customers who attempted to cancel their subscriptions and failed to do so since January 1, 2019.
James stated that the company, which provides access to satellite radio channels and exclusive broadcasts for subscribers between $13.99 and $23.99 a month, intentionally maintains lengthy and cumbersome cancellation processes aimed at frustrating customers.
The lawsuit claims that customers cannot cancel their subscriptions except by calling or chatting online with an agent, and Sirius XM has trained customer service agents to “not accept refusal and continue to harass customers with questions or offers until they give in or become frustrated,” according to a statement from James’s office.
James alleges that the business practices violated several laws in New York that require companies to provide a “simple, immediate, and easy-to-use cancellation mechanism” for subscribers.
Sirius XM told Forbes that the company provides “a variety of options for customers to subscribe to Sirius XM service or cancel their subscriptions” and expressed its intention to “vigorously defend against these baseless allegations that mischaracterize Sirius XM’s practices.”
The Big Number
30 minutes. This is the average time it takes a customer to cancel their Sirius XM subscription online, according to James’s office. It takes an average of 11 and a half minutes to do so over the phone.
Main Background
As subscription services for entertainment, household goods, books, pet products, workout apparel, and more have proliferated, so too have the laws surrounding how companies operate their subscriptions, change fees, lure subscribers, and allow customers to cancel. Amazon was previously accused this year by the Federal Trade Commission of tricking millions of customers into subscribing to the $139 Amazon Prime service without their consent and then putting barriers in the way of those customers to cancel their subscriptions. The FTC filed a lawsuit in Seattle last June accusing the company of using “manipulative and repetitive or misleading user interface designs known as ‘dark patterns’ to deceive consumers.” Last fall, the Financial Consumer Protection Bureau filed a lawsuit against an online event registration company used by YMCA camps and charity race organizers, accusing it of tricking people into subscribing to an annual discount club when they attempted to register for a single event. ACTIVE Network claimed it collected hundreds of millions of dollars from people who thought they were registering for only one race only to find out they had signed up for a recurring membership club that offers discounts for unrelated products and activities, and a class-action lawsuit with the same allegations was filed earlier this year.
Further Reading
Forbes Advisor: Were you “tricked” into subscribing to Amazon Prime? Here’s how to fix it and what regulators are doing about it
From Forbes: Launching a $16 monthly subscription tier after a drop in ad revenue by Brittany Nguyen
From Forbes: Digital subscriptions Americans want to cut and those they want to keep in 2023
Follow me on Twitter. Send me a secure tip. Mary Whitfield Roloffs
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