Photo Credit: SiriusXM
A New York judge rules that SiriusXM made it too difficult for customers to cancel their service, weeks after federal regulators enact a click-to-cancel rule for subscriptions.
New York State Supreme Court Justice Lyle Frank ruled on Thursday that SiriusXM made it too difficult for its customers to cancel their subscriptions, in violation of federal consumer protection law. Though Judge Frank said the company’s policies didn’t qualify as fraud or deception, they still violated the Restore Online Shoppers’ Confidence Act (ROSCA), which requires services to provide a “simple” cancellation process.
The ruling comes in a lawsuit filed last year by Attorney General Letitia James, who accused SiriusXM of subjecting cancelling subscribers to a “burdensome endurance contest” that required phone conversations with a live agent and time spent on hold.
Judge Frank’s ruling determined that the satellite radio company had made it harder to cancel a subscription than it was to sign up for one in the first place, citing “inevitable wait times” before customers are able to speak to a live agent. Agents are instructed by SiriusXM to “think of every ‘no’ simply as a request for more information.”
The judge’s ruling, though in agreement with some allegations against the company, dismissed four of the lawsuit’s five counts, including the attorney general’s assertion that SiriusXM violated New York state law barring such services from committing fraudulent conduct or deceptive practices.
“Respondents allow for a customer to sign up to a subscription without interacting with a live agent, but require that a customer do just that in order to cancel,” wrote the judge. “The policies may not rise to the level of fraud, […] but they do fail the simple mechanism requirement of ROSCA.”
Judge Frank wrote that the company had “taken repeated steps” to prevent its cancellation process from crossing the line into outright fraud. He cited other training materials from the company that told agents to be “fast, friendly, and efficient,” and that it is “okay to let a customer leave.”
“That Sirius, when contacted by customers requesting a cancellation, then engages in a conversation that offers some customers a different or better deal on their subscription before proceeding to cancellation, is not deceptive or misleading,” wrote Judge Frank. “It may be frustrating, but it is not deceptive.”
SiriusXM, meanwhile, plans to appeal the ruling. The company said the decision showed that the initial complaint filed by Attorney General Letitia James was untrue, that the company had not “continued to engage in repeated and persistent fraud and illegality.”
“[Judge Frank] dismissed almost all of the charges against SiriusXM and found that SiriusXM’s policies were neither misleading nor deceptive,” said the company. “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 also affirmed it would abide by the Federal Trade Commission’s new rule for a wide range of subscriptions such as streaming, pay-TV, and gym memberships, which is to take effect in early 2025. “The FTC’s rule will end these tricks and traps, saving Americans time and money,” said FTC Chair Lina Khan. “Nobody should be stuck paying for a service they no longer want.”
