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Lawsuit over SiriusXM cancellations moved to federal court

New York state prosecutor says radio company makes it difficult for subscribers to cancel their accounts.

New York state prosecutor says radio company makes it difficult for subscribers to cancel their accounts.

Jennifer Witz, SiriusXM Chief Executive Officer speaks onstage during the SiriusXM Next Generation: Industry & Press Preview at The Tisch Skylights at The Shed on November 08, 2023 in New York City. (Photo by Mike Coppola/Getty Images for SiriusXM)
Jennifer Witz, SiriusXM Chief Executive Officer speaks onstage during the SiriusXM Next Generation: Industry & Press Preview at The Tisch Skylights at The Shed on November 08, 2023 in New York City. (Photo by Mike Coppola/Getty Images for SiriusXM)

A lawsuit brought by the New York state attorney general accusing SiriusXM of malpractice over account cancellations has been moved to federal court at the company’s request.

The lawsuit, filed last December, claims SiriusXM makes it difficult for its satellite and streaming radio customers to cancel their subscriptions when they attempt to do so online and over the phone.

In a complaint filed in New York state court last year, State Attorney General Letitia James claims SiriusXM provides its customer support staff with a “lengthy, six-part script” that is designed to create a “lengthy and burdensome cancellation process” when customers try to end their service.

The lawsuit was filed following an investigation by James’ office, in which SiriusXM furnished the state attorney general with information about its business and, specifically, how it facilitates account cancellation requests made by customers.

According to James, SiriusXM makes customers can wait over 25 minutes before they are connected with an agent. Once connected, the agents are instructed to make several offers to customers in order to convince them to continue paying for the service, James said.

“Agents are instructed to think of every no simply as a request for more information, and to press forward until the consumer accepts an offer or abandons the cancellation effort, hounding them with additional questions and information,” the complaint said.

The state attorney general is seeking “full restitution for all impacted subscribers nationwide, including compensation for the time SiriusXM wasted by putting its subscribers through a deliberately lengthy cancellation process,” according to the complaint, though it did not specify an amount.

A SiriusXM spokesperson said the company “intend(s) to vigorously defend against these baseless allegations that grossly mischaracterize SiriusXM’s practices.”

Last week, a state magistrate judge assigned to the matter accepted a request to move the lawsuit to federal court, citing jurisdictional grounds. A federal judge will determine whether SiriusXM violated any state or federal law with respect to its account cancellation practices.

In addition to the satellite and streaming radio platform, SiriusXM owns streaming music service Pandora and several podcast platforms, including Stitcher, Earwolf and Team Coco. Those businesses are not included in their lawsuit.

Late last year, in an effort to win over more subscribers, SiriusXM announced it was revamping its business with a focus on music- and artist-specific experiences. As part of the refresh, SiriusXM relaunched its flagship streaming audio app with more-personalized content recommendations, and lowered the price of its all-inclusive streaming plan to $10 per month.

SiriusXM has faced numerous business-related challenges over the past few years, including stagnant growth in the number of customer additions. As The Desk reported in August, SiriusXM’s paid subscriber count has hovered around 34 million customers over the past three years.

Executives have been quick to point out that the company’s churn rate, particularly with its satellite radio product, has been relatively low over that same period of time. Earlier this year, SiriusXM CEO Jennifer Witz said on a conference call that the company had “record high revenue and record low churn” during its prior financial year, which ended December 31, 2022.

“Our strong operating and financial performance in 2022 are a testament to our resilient business model and growing contribution from streaming,” Witz said, suggesting that the company’s compelling offers across satellite and streaming radio — and not its apparent strategy of making subscribers jump through hoops to cancel their service — was the reason behind its low churn rate.

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About the Author:

Matthew Keys

Matthew Keys is the publisher of The Desk and reports on the business and policy matters involving the broadcast television, streaming video and radio industries. He previously worked for Thomson Reuters, Disney-ABC, Tribune Broadcasting and McNaughton Newspapers. Matthew is based in Northern California, has won numerous awards in the field of journalism, and is a member of IRE (Investigative Reporters and Editors).