Sirius Radio Must Change Renewal Policy

LAS VEGAS (CN) - Sirius XM Radio will pay $3.8 million and change its policies on automatic subscription renewals to settle to class actions filed by 45 states and the District of Columbia.

In Nevada's filing for Assurance of Voluntary Compliance, Attorney General Catherine Cortez Masto says 45 states and the District of Columbia will share the $3.8 million settlement for Sirius's "misleading, unfair and deceptive trades or practices" that, without customers' consent of knowledge:

Automatically renewed subscriptions;

Billed, charged debit or credit cards or withdrew money from bank accounts;

Did not honor cancellation requests;

Made it difficult to cancel services;

Refused to refund or make timely refunds of cancellation requests for automatically renewed services;

And misrepresented that services would be canceled and refunds issued.

Sirius did not have to acknowledge that it did anything wrong.

It claims that it disclosed the terms of its automatic renewal policy and properly billed and obtained payment for service renewals.

The settlement applies only to Sirius XM's "self-pays subscription plans" for individual consumers, and establishes several compliance provisions.

The compliance provisions govern Sirius XM's policies regarding free-trial and promotional subscription plans; advertising and point-of-sale disclosures; automatic renewals; customer cancellation requests; and complaint resolution.

The settlement also requires Sirius XM to select a facilitator with expertise in consumer protection law who will that ensure complaints and other issues are handled in a "timely manner."

The facilitator will be removed after six months or if a majority of states' attorneys general from an executive committee overseeing the settlement say removal is necessary.

Sirius XM also must create and maintain a record of eligible complaints and regularly report on the resolution process to each participating state. The report must include information on the type of complaint filed by each consumer; the consumer's contact information along with any identifiable loss; and any resolution made.

The attorneys generals of the 45 states and the District of Columbia conducted an investigation of Sirius XM's automatic renewal activities in 2010 and determined the company violated consumer protection laws.

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