SiriusXM violated federal consumer protection laws 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 Jameswho accused the satellite radio company of subjecting canceling subscribers to an “arduous endurance contest” that required phone conversations with a live agent and extended wait times.
In a decision issued on Thursday, Judge Lyle Frank said SiriusXM's policies did not rise to the level of fraud or deception, but nonetheless violated the Internet Consumer Confidence Restoration Act — a federal law that requires these services to provide a “simple” cancellation process.
In doing so, the judge ruled that SiriusXM had made it much more difficult to cancel a subscription than it was to sign up for a subscription in the first place. He cited “unavoidable wait times” before customers spoke with agents whom SiriusXM had instructed to “think of every 'no' as simply a request for more information.”
“Respondents allow a customer to sign up for a subscription without interacting with a live agent, but require the customer to do just that to cancel,” the judge wrote. “The policies may not rise to the level of fraud … but they fail ROSCA's simple mechanism requirement.”
Although the court sided with New York on that question, it also dismissed four of the lawsuit's five counts, including the attorney general's claims that SiriusXM's practices violated New York state laws prohibiting fraudulent conduct or deceptive practices.
Judge Frank said the company had “repeatedly taken steps” to prevent going through the cancellation process from “degenerating” into fraud. He cited other training materials in which the company told agents to be “quick, friendly and efficient” and that “it's OK to let a customer go.”
“That Sirius, when contacting customers requesting cancellation, engages in a conversation that offers some customers a different or better deal on their subscription before canceling is not misleading or deceptive,” the judge wrote. “It may be disappointing, but it is not misleading.”
In a statement to Bulletin board On Friday, SiriusXM highlighted those aspects of the decision, saying the court “dismissed virtually all of the allegations” and found the company's process “neither misleading nor deceptive.”
“While the court found some technical violations of a federal law, it did not find that SiriusXM ever defrauded anyone or committed any fraud,” the company wrote. “SiriusXM intends to appeal the court's decision regarding these technical violations.”
In her own statement, the attorney general said the decision would force Sirius to “change its cancellation procedures in New York” and ensure that the company's customers “are no longer required to speak or chat with a live agent to cancel ».
“No one should have to endure a long and frustrating process to cancel a subscription, and any company that makes customers 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 streamline the cancellation process to stop taking advantage of New Yorkers.”
Thursday's written ruling says New York is entitled to an injunction against SiriusXM forcing the company to change its practices to comply with the federal statute. It also ordered an “assessment of damages against defendant Sirius XM,” but did not say how much the monetary penalty might be.
