AdminNowadays it seems easy to cancel companies, people, society and even the corner shop. But bless our impatient hearts if we even think about canceling a gym membership or music subscription. Except in New York State, where a judge recently ruled that SiriusXM’s cancellation policy violates federal law.
As reported by The edgeLast year, SiriusXM was sued by the state amid claims that subscribers who tried to cancel were essentially held hostage, either by incessant inquiries or repeated retention offers. According to the lawsuit, Sirius intentionally wastes its subscribers’ time even though it has the ability to process cancellations at the click of a button.
The lawsuit also alleged that SiriusXM’s own data showed that customers spent an average of 11.5 minutes on the phone or 30 minutes online with customer service representatives. Before you dismiss this as frivolous, a key point was the Restore Online Shoppers’ Confidence Act (ROSCA), a consumer protection law signed into law by Congress in 2010.
The law states that consumers should be provided with “simple mechanisms” to stop recurring charges, especially subscription services. An investigation by the attorney general’s office found that potential quitters were kept on the phone for extended periods while being presented with “as many as five retention offers.”
So New York sued SiriusXM because not only was it time-consuming, but because the long phone calls to customer service were illegal anyway. The judge agreed, stating that SiriusXM’s cancellation practices were “protracted and burdensome.”
“Their cancellation procedure is clearly not as easy to use as the initiation method,” he said.
As a result, SiriusXM will have to change its cancellation process, at least in New York. It was not made clear how or what the new policy would entail.
Separate, but not separatethe Federal Trade Commission (FTC) announced a new ‘Click to Cancel’ ruleas month. In the same vein as ROSCA, companies should “make it as easy for people to opt out of your program as it is to opt in.” This includes eliminating the need for customers to chat with a representative (in person, on the phone, or online) if they were not required to do so during sign-up. The FTC’s Click to Cancel rule will go into effect next year.
SiriusXM, of course, plans to appeal New York’s ruling. “While the Court found some technical violations of a federal statute, it did not find that SiriusXM ever deceived anyone or committed fraud,” SiriusXM spokesperson Maggie Mitchell said in a statement to The edge. Regarding the FTC, Mitchell said SiriusXM will comply with the new cancellation requirement.
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