There has been a movement lately by federal and state consumer authorities to make cancellation of subscriptions much easier. It is often said that cancellations need to be as easy as initial sign-ups.
In fact, the federal law called Restore Online Shoppers’ Confidence Act (“ROSCA”) has been on the books since 2010. It says for negative option plans, like subscriptions that continue from month to month until canceled provides:
*MOUSE PRINT:
…simple mechanisms for a consumer to stop recurring charges from being placed on the consumer’s credit card, debit card, bank account, or other financial account.
The New York Attorney General decided to go after SiriusXM for making it difficult for customers to cancel. They alleged that subscribers had to speak to a live agent, who, working from a prepared script, presented ever-more-enticing retention offers to discourage the member from cancelling. Basically, they were instructed not to take no as an answer.
The New York Supreme Court took up the matter and ruled. While finding in favor of SiriusXM on various of the state’s legal theories of state law violations, they found that Sirius’ actions violated ROSCA. Specifically, the court pointed to a 2021 interpretive statement from the FTC that said in part that cancellation methods have to be as easy as their sign-up method, and that the companies should not subject consumers to new offers or similar attempts that unreasonably delay the consumer’s cancellation efforts.
Given those requirements, the court found in favor of New York and ordered that (monetary) damages be assessed.
(This story comes from the Mouse Print* archive of unpublished stories of consumer interest.)
