Filed under: Consumer Ally, Scandals and Lawsuits, Consumer Issues, Consumer Protection
In a settlement announced on Thursday with 45 states and the District of Columbia, Sirius XM (SIRI) agreed to pay $3.8 million to resolve allegations the company misled consumers through its advertising and billing practices. In addition, the company agreed to pay restitution to customers who encountered problems addressed in the settlement (pdf).
"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 Douglas Gansler said. "Requiring Sirius to change its business practices means customers will be better informed about their rights and the terms of their agreement."
Sirius said it has changed its practices.
Among the issues raised in the investigation was that customers trying to cancel their contracts found that they were ignored. Another involved customers getting automatic renewals at higher rates that they were not aware of.
In a statement, Sirius XM spokesman Patrick Reilly said:
Sirius XM in the settlement agreed to:"We are pleased to have reached agreements that resolve this investigation. The changes to our consumer practices that we agreed to are practices we have already implemented at SiriusXM. 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."
- Clearly disclose the terms and conditions at the point of sale, including billing frequency, term length, any automatic renewal date, and the cancellation policy.
- Not misrepresent information about available plans in advertisements.
- Provide advance notice about upcoming automatic renewals for plans lasting longer than six months.
- Revise cancellation procedures to make it easier to cancel.
- Prohibit compensation for customer service representatives based solely on retaining customers who attempt to cancel.
Those eligible for refunds must have had the problem between July 28, 2008 and Dec. 4, 2014 and haven't had it resolved. To be eligible, a complaint should be filed with your state attorney general by May 1.