SiriusXM offers satellite car radio and streaming audio subscription services. To entice customers to sign-up, SiriusXM offers free or heavily discounted promotional periods in exchange for the customer agreeing to set-up automatic recurring payments. Once the promotional period or the initial subscription term ends, the automatic subscription price increases substantially, often with hidden additional fees like the “U.S. Music Royalty Fee” tacked on.
Because SiriusXM’s policy is not to notify subscribers when price increases are going into effect, SiriusXM subscribers are often surprised to learn that they have been charged significantly more than the price that was initially advertised or they were quoted. This kind of conduct without adequate notice is sometimes referred to as a ‘negative option’ scheme and violates state and federal laws that regulate agreements for automatic recurring payments for subscriptions.
Labaton is pursuing private arbitration claims against SiriusXM on behalf of its subscribers that were not properly notified that the recurring charges to their debit or bank accounts were going to increase substantially before their payment method was charged at the new rate. Successful claims could be entitled to compensation of up to $1,000.
