SiriusXM Pays $3.8 Million in 46-State Settlement
Satellite-radio company was accused of misleading advertising & billing practices.
SiriusXM agreed to pay $3.8 million as part of a settlement with the attorney generals in 46 states who were investigating the company for allegedly engaging in misleading advertising and billing practices.
"Consumers shouldn't have to read the super-fine print or jump through hoops to understand and cancel their service contracts," Maryland Attorney General Douglas Gansler said in a statement. "Requiring Sirius to change its business practices means customers will be better informed about their rights and the terms of their agreement."
Sirius was being investigated for problems consumers encountered when canceling their contracts and allegedly not adequately disclosing that consumer contracts were automatically renewed, often at rates that were higher.
As part of the settlement, SiriusXM agreed to:
-Clearly 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 retaining current customers who attempt to cancel.
SiriusXM released this statement following the settlement announcement: "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."