SiriusXM violated federal consumer protection law by making it too difficult for listeners to cancel their subscriptions, a New York judge says.
The ruling came in a lawsuit filed last year by Attorney General Letitia James, who accused the satellite radio company of subjecting cancelling subscribers to a “burdensome endurance contest” that required phone conversations with a live agent and extended time spent on hold.
In a decision issued Thursday, Jude Lyle Frank said that SiriusXM’s policies didn’t rise to the level of fraud or deception, but had still violated the Restore Online Shoppers’ Confidence Act – a federal law requiring such services to provide a “simple” cancellation process.
In doing so, the judge ruled that SiriusXM had made it far harder to cancel a subscription than it was to sign up for one in the first place. He cited “inevitable wait times” before customers speak to agents who SiriusXM had instructed to “think of every ‘no’ simply as a request for more information.”
“Respondents allow for a customer to sign up to a subscription without interacting with a live agent but require that a customer do just that in order to cancel,” the judge wrote. “The policies may not rise to the level of fraud … but they do fail the simple mechanism requirement of ROSCA.”
Though the court sided with New York on that question, he also dismissed four of the lawsuit’s five counts, including the attorney general’s allegations that SiriusXM’s practices violated New York state laws barring fraudulent conduct or deceptive practices.
Judge Frank said the company had “taken repeated steps” to prevent its cancellation process from crossing the line from “aggravating” into outright fraud. He cited other training materials in which the company told agents to be “fast, friendly, and efficient” and that “it’s ok to let a customer leave.”
“That Sirius, when contacted by customers requesting a cancellation, then engages in a conversation that offers some customers a different or better deal on their subscription before proceeding to cancellation is not deceptive or misleading,” the judge wrote. “It may be frustrating, but it is not deceptive.”
In a statement to Billboard on Friday, SiriusXM stressed those aspects of the decision, saying the court had “dismissed almost all of the charges” and found the company’s process to be “neither misleading nor deceptive.”
“While the court found some technical violations of a federal statute, it did not find that SiriusXM ever deceived anyone or committed any fraud,” the company wrote. “SiriusXM intends to appeal the court’s ruling as to those technical violations.”
In her own statement, the attorney general said the ruling would force to Sirius to “change its cancellation procedures in New York” and ensure the company’s customers are “no longer required to speak or chat with a live agent in order to cancel.”
“No one should have to endure a lengthy and frustrating process to cancel a subscription, and any company that forces customers to jump through unnecessary hoops to end their subscriptions is breaking the law,” James said. “My office sued SiriusXM to protect consumers, and as a result of our actions, they will have to simplify their cancellation process to stop taking advantage of New Yorkers.”
Thursday’s written decision says New York is entitled to an injunction against SiriusXM forcing the company to alter its practices to adhere to the federal statute. He also ordered an “an assessment of damages against respondent Sirius XM,” but did not say how large of a monetary penalty it might be.
