The settlement resolves allegations that the New York-based satellite radio company engaged in misleading advertising and billing practices.
The multistate investigation focused on problems that consumers encountered when canceling their contracts and allegations that SiriusXM did not adequately disclose that consumers’ contracts were automatically renewed without consumers’ notice or consent, often at rates that were higher than anticipated.
“Consumers shouldn’t have to read the super-fine print or jump through hoops to understand and cancel their service contracts,” said Maryland Attorney General Doug Gansler. “Requiring Sirius to change its business practices means customers will be better informed about their rights and the terms of their agreement.”
Under the terms of the settlement, Sirius XM will make significant changes to its business practices by agreeing to:
- Clearly and conspicuously disclose all terms and conditions to consumers at the point of sale, including billing frequency, term length, any automatic renewal date, and its cancellation policy
- Make no misrepresentations about the available plans in advertisements
- Provide advance notice via mail or email about upcoming automatic renewals for plans lasting longer than six months
- Revise the cancellation procedures to make it easier for consumers to cancel
- Prohibit incentive compensation for customer service representatives based solely on “saves,” or retaining current customers who attempt to cancel.
In addition to paying the Attorneys General $3.8 million, SiriusXM will pay restitution to resolve complaints from eligible consumers who encountered problems canceling their services or obtaining refunds during from July 28, 2008 to Dec. 4, 2014.