Almost a year after New York Attorney General Letitia James filed a lawsuit against SiriusXM claiming the company, “Illegally traps people into subscriptions,” with a lengthy cancellation process, a court has ruled against the satellite broadcaster.
The decision, issued by New York Supreme Court Justice Lyle Frank, concluded that SiriusXM’s cancellation process was unnecessarily burdensome compared to its subscription sign-up method.
Justice Frank highlighted that SiriusXM allowed customers to sign up easily through an online form but required cancellations to be made via a phone-based customer service system. This approach included lengthy wait times and an evaluation process where agents offered multiple incentives to retain customers before proceeding with cancellations.
According to the decision, a core tenet of SiriusXM’s defense was how, “Many customers who purportedly call to cancel their subscription are in reality looking to get a discount on their service, and their customer service agents are directed to respond accordingly.”
An investigation into consumer complaints revealed that SiriusXM trains employees to engage customers in a six-part conversation with up to five retention offers when canceling subscriptions. The process averages 11.5 minutes by phone and 30 minutes online.
AG James celebrated the win on X, saying, “A court found that SiriusXM illegally forced people to go through a long and burdensome process to simply cancel their subscriptions. We sued SiriusXM to protect people’s wallets, and now, SiriusXM must simplify its cancellation process and stop taking advantage of New Yorkers.”
SiriusXM issued a statement Friday expressing its intent to appeal the ruling.
The company noted, “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.”
“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 intends to appeal the Court’s ruling as to those technical violations,” the statement said.
SiriusXM also confirmed its commitment to comply with a new FTC rule designed to simplify subscription cancellations. Effective January 14, the rule will require businesses to offer cancellation processes as simple as their sign-up methods. The regulation also mandates that businesses provide clear terms for subscription agreements. Whether the rule will be upheld under the incoming administration remains uncertain.
