ALBANY — New York State Attorney General Letitia James sued SiriusXM Radio on Wednesday alleging the music streaming service traps consumers in subscriptions and deliberately has a long and burdensome cancellation process.
An investigation by James’ office found SiriusXM requires subscribers to call or chat online with an agent to cancel a subscription and then deliberately draws out the process as part of its process to prevent subscribers from canceling.
“Having to endure a lengthy and frustrating process to cancel a subscription is a stressful burden no one looks forward to, and when companies make it hard to cancel subscriptions, it’s illegal,” James said in a statement. “Consumers should be able to cancel a subscription they no longer use or need without any issues, and companies have a legal duty to make their cancellation process easy. New Yorkers can trust that when companies like SiriusXM try to take advantage of them and violate the law, my office will step in to stop them.”
Sirius XM’s company headquarters are based in New York City and the service has about 35 million subscribers — about 2 million of which are in New York. The attorney general’s office opened an investigation after it received hundreds of complaints and reports that customers could not cancel their subscription.
James said the investigation found the company trains its agents to keep customers on the phone and chat for a six-part conversation that includes a series of questions and then agents are to pitch customers as many as five retention offers to delay cancellation. The investigation found it takes an average of 11.5 minutes to cancel by phone and 30 minutes to cancel online.
New York has taken several steps in recent years to address predatory subscription services. Last week, Gov. Kathy Hochul signed two bills to address the issue. The first requires companies to notify customers of automatic subscription renewals and provide clear instructions on how to cancel. The other requires companies to post the highest price a consumer might pay for a subscription, regardless of payment methods.
Companies that fail to clearly post the highest price, including surcharges, could face a fine of up to $500 per violation. Companies will also now be required to notify consumers of an upcoming automatic renewal 45 days before the charge and the notification must include instructions on how to cancel the subscription.
“I want the trial to end, but they make it so hard, right? It's intentionally designed to be hard, so the money keeps going to them and out of your pockets,” the governor said last week. “The automatic renewal has to stop, and they have to notify you, we're saying, OK, how about letting people know before, when it's a 10-day free trial and all of a sudden you're paying $51 for three months and then it keeps going up and then an automatic renewal is now $73 a month.”
James’ lawsuit against SiriusXM alleges the company violated both state and federal laws by providing subscriptions that renew automatically without providing customers with a cancellation mechanism that is simple, timely and easy to use. The lawsuit also charges the company with fraud and deception by misleading customers trying to cancel their subscription.
The lawsuit will seek restitution for all impacted subscribers nationwide, including compensation for the time subscribers spent during the deliberately lengthy cancellation process. It also seeks disgorgement, penalties and to require SiriusXM to implement an easy-to-use cancellation process.