New York Attorney General Letitia James has initiated legal action against SiriusXM Radio, Inc., accusing the company of entrapping customers in unwanted subscriptions. The lawsuit follows a thorough investigation by the New York Office of the Attorney General (OAG), which revealed that SiriusXM employs intentionally prolonged and complicated cancellation procedures.
The OAG investigation found that SiriusXM subscribers are required to engage in either a call or an online chat with a company representative to cancel their subscriptions. This process is reportedly drawn out intentionally, making it a significant challenge for consumers to terminate their services.
Attorney General James emphasized the illegal nature of such practices, stating, “Having to endure a lengthy and frustrating process to cancel a subscription is not only stressful but illegal when companies make it excessively difficult.” The lawsuit aims to secure restitution and penalties against SiriusXM for violating New York’s business laws.
Based in New York City, SiriusXM boasts approximately 35 million subscribers, including nearly 2 million in New York. The lawsuit follows numerous consumer complaints about the arduous process of canceling SiriusXM services. According to the OAG, the company trains its agents to engage customers in a prolonged six-part conversation, often involving multiple retention offers, to delay cancellation.
Data from SiriusXM indicates that it takes an average of 11.5 minutes to cancel a subscription over the phone and up to 30 minutes online. However, many customers experience even longer wait times. The OAG discovered that despite these lengthy processes, cancellation could be completed with a simple click of a button.
Consumers have reported extreme difficulties in canceling their subscriptions. One case involved a 40-minute chat where the customer’s repeated cancellation requests were ignored, and they were still charged subsequently. Another incident described a frustrating 40-minute phone call experienced by a 92-year-old woman’s daughter.
The lawsuit charges SiriusXM with violations of state and federal laws concerning automatic renewal subscriptions. These laws mandate a simple, timely, and user-friendly cancellation mechanism, which SiriusXM allegedly fails to provide. The OAG also accuses SiriusXM of engaging in fraudulent and deceptive practices by misleading subscribers and attempting to cancel.
Attorney General James seeks full restitution for affected subscribers nationwide, demanding compensation for the time wasted in the cancellation process. Additionally, she calls for disgorgement, penalties, costs, and the implementation of a straightforward cancellation procedure.
The Attorney General encourages consumers affected by SiriusXM’s cancellation practices or similar issues with other automatic renewal services to file a complaint online.
INSIDER TAKE
The lawsuit against SiriusXM underscores a critical issue in the subscription industry: the need to align cancellation processes with legal standards and, importantly, customer expectations. The adage that making cancellations easy is a best practice in the subscription world holds true, not just from a customer experience standpoint, but also from a legal and ethical perspective.
A notable point in this situation is the balance between customer retention and respecting consumer rights. While customer retention is a crucial aspect of business sustainability, it should never overshadow the importance of ethical practices and ease of service termination. The simple principle that if subscribers have a positive experience—even when canceling—they are more likely to return, is often overlooked.
This lawsuit serves as a cautionary tale, emphasizing the importance of maintaining a customer-centric approach while also adhering to legal and ethical standards. It’s a reminder that in the subscription industry, the way a service ends is just as important as how it begins.
