This post comes from Bob Sullivan at partner site Credit.com.
Last year, I reported on Sirius XM’s business practice of pushing customers into contracts that would automatically renew. In my case, the firm simply refused to allow me to sign up without agreeing to automatic renewal, which I hate. I had experienced surprise renewals from them in the past. So I canceled. Apparently, I wasn’t the only one frustrated by the firm.
A group of 45 state attorneys general last week announced a settlement after they alleged deception by the firm.
The allegations included “difficulty canceling contracts; cancellation requests that were not honored; misrepresentations that the consumer’s Sirius XM service would be canceled and not renewed; contracts that were automatically renewed without consumers’ notice or consent; unauthorized fees; higher, unanticipated rates after a low introductory rate; and Sirius XM failing to provide timely refunds,” said a statement from the office of Ohio Attorney General Mike DeWine.
Sirius XM responded to me Thursday, saying they were pleased by the settlement.
“The changes to our consumer practices that we agreed to are practices we have already implemented at Sirius XM,” Patrick Reilly, senior vice president, communications, told me. “Under the terms of the settlements, we have agreed to provide, upon the request of the states, additional information about our consumer practices and to participate in a process designed to address any previously unresolved consumer complaints. In addition, we agreed to make a payment of approximately $4 million to the states that has no material financial effect on the company.”
How can you collect?
The firm will pay a $3.8 million settlement and issue refunds to consumers.
“Consumers should be able to understand what they are purchasing and exercise their cancellation rights without hassle,” DeWine said. “We found that many Sirius XM customers had difficulty canceling their contract or were surprised when their contracts renewed automatically. We are pleased that under this settlement Sirius XM will make significant changes to its business practices and provide reimbursement to consumers.”
Consumers won’t automatically get refunds, however. If you feel you were mistreated by the firm, you must register your complaint on this website.
“To be considered for restitution under this settlement, consumers must file a complaint concerning conduct that occurred from July 28, 2008, to Dec. 4, 2014, involving an identifiable loss that has not been previously resolved with their state attorney general,” DeWine’s statement said.
Sirius XM has also agreed to a number of changes in its business practices, including:
- Clearly and conspicuously disclose all terms and conditions at the point of sale, such as billing frequency, term length, automatic renewal date and 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.
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