Baltimore, MD (Dec. 4, 2014) - Attorney General Douglas F. Gansler announced today that his Consumer Protection Division, joined by 45 other Attorneys General, entered into a $3.8 million settlement with Sirius XM Radio Inc., resolving allegations that the New York-based satellite radio company engaged 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," said Attorney General Gansler. "Requiring Sirius to change its business practices means customers will be better informed about their rights and the terms of their agreement."
The multistate investigation focused on problems that consumers encountered when canceling their contracts and allegations that Sirius XM did not adequately disclose that consumers' contracts were automatically renewed without consumers' notice or consent, often at rates that were much higher than anticipated.
Under the terms of the settlement, Sirius XM will make significant changes to its business practices by agreeing to:
- Clearly and conspicuously 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 "saves," or retaining current customers who attempt to cancel.
In addition to paying the Attorneys General $3.8 million, Sirius XM will pay restitution to resolve complaints from eligible consumers who encountered problems canceling their services or obtaining refunds during the period of July 28, 2008 to Dec. 4, 2014.
Consumers who have not already filed a complaint with the Attorney General's Office may do so by May 1, 2015, to participate in the restitution program. Marylanders can file a complaint online at http://www.oag.state.md.us/Consumer/complaint.htm or get more information by calling 410-528-8662.