By Hank Russell
A New York State Supreme Court judge ruled in favor of New York State Attorney General Letitia James, in part, in her lawsuit against satellite radio company SiriusXM. In the suit, James claimed the media company locked New York customers into subscriptions they did not want. While the court said that the radio company committed technical violations, they said its policies never misled or deceived the public.
As part of its subscription agreement, according to the website, subscription plans automatically renew and customers will be charged at the rate for the day of the renewal until they cancel. Customers must cancel at least 24 hours before the start of the renewal, and the cancellation is effective at the end of the current billing period. No refunds are offered, except what is provided in the customer agreement.
James sued SiriusXM in 2023 after an investigation by the Office of the Attorney General (OAG) revealed that the company requires its subscribers to call or chat online with an agent to cancel a subscription, and trains its agents not to take “no” for an answer. SiriusXM’s illegal process deliberately draws out conversations with customers as part of a strategy to prevent them from canceling their subscriptions.
Judge Lyle E. Frank found that SiriusXM violated the Restore Online Shoppers’ Confidence Act (ROSCA) because it did not provide customers the ability to cancel their subscriptions in an easy and efficient manner. In fact, the media company instructed its sales agents to continue providing multiple offers whenever the customers said ‘no,’ in violation of guidance from the Federal Trade Commission. “Respondents argue that multiple save offers are permissible in some circumstances under this FTC guidance. While that is true, the extent to which Respondents utilize multiple save offers in a call constitutes an unreasonable delay,” Frank wrote in his decision.
James said that, in affidavits submitted to OAG, consumers described how frustrating and difficult it was to cancel subscriptions they no longer used or wished to pay for. In one case, a SiriusXM agent kept a subscriber in a chat for 40 minutes, despite the subscriber’s clear and repeated requests to cancel, according to a log of the chat. And after that, the company continued to charge the customer anyway. Another complaint — handwritten by a consumer on behalf of her 92-year-old mother — described a maddening phone call with a SiriusXM agent that lasted nearly 40 minutes.
However, Frank noted that the cancellation policies were not fraudulent or misleading. “[W]hile some customers might find the process frustrating or unfair, [James] has not alleged conduct arising to fraud or deception,” he said, adding that, although she could collect affadavits from out-of-state customers. she could not collect damages on their behalf.
“Customers are told when signing up that they must speak to a live agent to cancel, and that is what they must do. There can be no triable issue of material fact regarding the cancellation process’s status as misleading or deceptive,” Frank said.
In a statement to Long Island Life & Politics, SiriusXM said, “New York started this case last year by alleging that ‘SiriusXM has continued to engage in repeated and persistent fraud and illegality.’ Today, we know, and the State of New York knows, that is not true.
“Yesterday, the Court dismissed almost all of the charges against SiriusXM, and found that SiriusXM’s policies were neither misleading nor deceptive. Most importantly, the Court ruled that SiriusXM had shown through ‘a plethora of material… that they have taken repeated steps to avoid creating such an atmosphere’ of fraud or deceit. While the Court found some technical violations of a Federal statute, it did not find that SiriusXM ever deceived anyone or committed any fraud.”
SiriusXM said it intends to appeal the Court’s ruling as to those technical violations. In addition, the company said it will abide by the recent FTC ruling when it goes into effect.