On December 20, 2023, New York Attorney General Letitia James filed a Petition in state court alleging Sirius XM Radio’s autorenewal practices violated New York’s autorenewal law. In the lawsuit, New York alleges that Sirius XM, an audio entertainment company headquartered in New York, made it difficult for customers to cancel their subscriptions.
New York’s automatic renewal law requires any business that makes an automatic renewal offer or continuous service offer to provide a cost-effective, timely, and easy-to-use mechanism for cancellation. The AG alleges that Sirius violated this requirement by:
- Requiring customers to call or chat with sales agents who are trained to engage in a lengthy, six-part script designed to convince customers not to cancel
- Repeatedly asking customers about their listening habits after they requested to cancel so Sirius customer representatives could attempt to “save” the customer using preselected offers
- Continuously offering additional, cheaper subscription offers to customers trying to cancel who explain that they are seeking to cancel because the cost of their subscription is too high
- Imposing unreasonable wait times for customers to connect with a live agent to cancel (sometimes over 45 minutes)
The lawsuit also alleges violations of New York’s general deceptive act and practices laws and the federal Restore Online Shoppers’ Confidence Act (ROSCA). The AG is seeking full restitution and damages for all aggrieved customers and disgorgement of all profits related to the alleged deceptive practices.
The lawsuit is yet another example of the expansion in regulatory action against subscription services, which will likely continue into 2024 and beyond. For example, the Federal Trade Commission (FTC) is set to hold an informal hearing in January regarding its Proposed Negative Option Rule. In addition, other states like California are actively enforcing their automatic renewal laws, and California has a dedicated Auto Renewal Task Force (CART) consisting of district attorneys who enforce the state’s autorenewal law. Waves of class action lawsuits continue to allege violations by negative option, free trial, continuity, and autorenewal practices.
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