Thursday, July 19, 2012

The SiriusXM Consumer Nightmare

NASCAR recently agreed to a five year contract extension with SiriusXM Satellite Radio. The sanctioning body is just one of a host of "content providers" that supply the service with programming for the various channels.

This most recent agreement also allowed SiriusXM NASCAR content to be streamed online. This had been a frustration of fans for many years. The move was a part of NASCAR's broader digital agenda to reclaim and control the rights to its own content.

"A dedicated NASCAR channel is important for our teams, tracks, drivers and sponsors and is crucial for fan engagement and audience growth," NASCAR Chairman Brian France said in a March 2012 media release. "Being able to simulcast SiriusXM NASCAR Radio online to subscribers nationwide will allow us additional opportunities to take our product to new fans in new places."

While SiriusXM has a strong history of diverse content, the company also has a growing reputation in another area. That area is consumer fraud. Over the years, many NASCAR fans have emailed about illegal billing practices, deceptive phone calls and poor customer service.

A working group of Attorneys General from 28 states began investigating SiriusXM for deceptive billing and customer solicitation policies back in 2010. The majority of the consumer complaints had a theme. They involved unauthorized credit and debit card charges.

The SiriusXM business is driven by the subscription revenue of users. Advertising revenue plays a minor role in this "pay radio" business model. The current investigation focuses on what is called "billing continuous subscriptions." This practice has reportedly raked in millions of dollars for SiriusXM from people who find themselves unable to stop the billing cycle.

Let's start at the beginning. Folks who sign-up for a trial offer with SiriusXM are asked to provide credit card information, even if the trial is free. The reason is that at the conclusion of the trial period SiriusXM automatically turns the trial into a full subscription and begins to auto-charge the user. There is no notification.

Existing subscribers who have already provided credit or debit card information are confronted with a well-rehearsed scenario when they try to cancel the service at the expiration of an annual contract. Either electronically or via telephone, they are assured that the subscription has ended. Then, a new charge appears on their credit card and the scam begins.

The Internet is littered with posts about the financial nightmares caused by the fraudulent behavior of SiriusXM. The scenarios are endless. Common citizens who trusted a company with a service now find themselves trapped in a world where dollars are being removed from their bank accounts without permission and for services confirmed as terminated.

Click here to take a peek at the Pissed Consumer website. The Sirius XM content is extensive and revolves around the same theme of fooling the consumer or failing to stop billing after confirmation of terminated service. It's just one of many online resources that address this issue.

The newest twist in this saga has raised eyebrows once again with online billing at the heart of the issue. Frustrated consumers who simply cannot stop the SiriusXM charges to their credit or debit cards usually cancel the card and have the bank send a new one. It might cause some work to change other accounts and billing, but this move should stop unauthorized charges since the old card is now cancelled. Well, think again.

Click here to read one of the many posts online about SiriusXM continuing to process payments on a cancelled credit card if the financial institution allows the transaction. In the world of online banking, this is a new risk that is very real.

The tips to deal with SiriusXM are basic. Before entering into any agreement, no matter how temporary, review the entire user agreement. The auto-review is buried in the paperwork and gives SiriusXM an out on most billing issues. Just like the extended auto warranty companies, SiriusXM walks the fine line between what a customer is being told on the phone and what is the legal bottom line in the agreement.

Do not disclose your credit card information to SiriusXM. Pay in full for any agreement with another form of payment. Credit and debit card deductions made from your bank account are immediate and the vast majority of consumer complaints revolve around money that has already been transferred. The possibility that you are going to recover funds is small.

Finally, document the services for which you have contracted. SiriusXM has a variety of options in terms of access to content and also how that content is delivered. Failure to specifically understand the satellite and online delivery agreements may bring additional charges.

After years of pushing hard to get the SiriusXM NASCAR channel available online, this positive change seems bittersweet when the company's solicitation and billing philosophy is based around what are essentially unfair business practices. A simple change in corporate culture could solve these problems and rid the company of this unfortunate stigma.

Happy to have your thoughts on this topic or experiences you have had with SiriusXM. Comments may be moderated prior to posting.


Anonymous said...

Good lord what a scam.There wasn't much chance of me subsribing to satellite radio anyway but that small chance was just done away with.It's hardly suprising though.


kbaskins said...

The easiest method to avoid the problem with more charges to a credit card:

1. Go buy one of those Visa or MasterCard gift cards in the appropriate amount.

2. Sign up for Sirius XM service using the credit card gift card.

3. Immediately use the remainder of the funds on the card to buy yourself or someone else a gift certificate at the NASCAR online store, Amazon, iTunes, Think Geek...wherever you shop online on a regular basis.

4. Toss the card, because that puppy is no longer useful.

5. Repeat this process in a year when SiriusXM sends you an email telling you that they can't charge your credit card for another year of service. Or don't repeat, if you think they suck or you can't afford it.


kbaskins said...

I forgot to mention those Visa and MasterCard gift cards are also scams. They often have a monthly "user fee" for the unused balance on a card. I suggest you use all the funds immediately to avoid a slow drain on the card. Last I heard, it was $2.95 per month deducted by the issuing company, but that may have changed or been removed altogether. I'm too lazy to research it. :-)


Anonymous said...

I once subscribed a relative to SI as a gift (came with some freebies.) He told me he did not want to renew. So imagine my surprise when the charge appeared on my bill a year later for renewal with no notice. Solved with a phone call. But still annoying. I am glad I don't live 'close to the edge'.

Anonymous said...

Someone told you they did not like the SiriusXM billing practice? Probably the same one that did not like the chase. MC

JLA said...

I have lived through this nightmare with SiriusXM radio and I can testify to the corruption! I had to have my debit card replaced twice because they debited my account when they had no right to do so. They lost a customer over their undesirable business practices. The worst part is, I really don't think they care. I won't ever re-subscribe and I won't ever recommend them to family or friends.

Thanks for writing this article JD, people need to know!


The Loose Wheel said...

I have not had any billing issues with them. Been with SIRIUS for about 5 years now also. However, I get around that by originally having a 3 year subscription, then paying quarterly since, but I do not authorize any automatic debits. The only unfortunate part of that is they hit you with a $2.00 invoice fee for sending you a paper bill. Not sure I will be with them much longer. Use them more for music and NFL than I do NASCAR anymore but that is a whole separate can of worms.

fbu1 said...

Shortly after the Sirius/XM merger, a close relative's account was arbitrarily elevated to the most expensive billing level. Despite phone assurances that the "mistake" would be corrected, they continued to charge the higher rate. He ended up terminating the service completely and canceled his credit card. Sirius/XM "won" about three months of extra income but lost a longtime customer. He has since cost Sirius/XM dozens of new customers by relating his experience.

Other companies have behaved in the same predatory manner in the past, most notably AOL. Several cable/dish providers have employed the same tactic, using "miscommunication" as an excuse. The legal cost to seek financial redress is prohibitive. Most folks just chalk it up as a learning experience. The predators count on that. Until there are legal consequences for corporate officers, including jail time, the predators regard any fines that might be imposed as just another cost of doing business.

The whole situation with Sirius/XM is quite sad. It used to be a great service.


earl06 said...

"Do not disclose your credit card information to SiriusXM. Pay in full for any agreement with another form of payment."

I can't stress this enough. They will hoover your bank/cc account if you let them. I was triple billed once, and double billed once. The triple put me over-limit and ended up costing me $110 out-of-pocket to fix.

Do the paper bill, they don't even care if you pay it from what I've observed. All they want is subscriber numbers and auto-debit accounts on file.

Anonymous said...

This is EXACTLY why I do NOT have SiriusXM !!! Have gone throughwith the then "other" took 4ever to get out of, along with money never recovered, not to mention time spent trying to resolve the issue of not wanting to renew my subscription!!

GinaV24 said...

Wow, what a mess that is. I was able to end my subscription without a lot of problems, but that sounds as if I'm one of the few. Although after reading this, I did take a few minutes to go back and look to make sure I wasn't being charged.

They've been pestering me to renew and the used vehicle I bought has a sirius receiver built in. I haven't done it yet, mainly because as much as I like being able to listen to the actual RACE broadcast if I happen to be in the car, the rest of the NASCAR programming doesn't thrill me enough to pay for it.

I've been getting their "free for X months" notifications. Now I feel that trusting that would be a very bad idea.

Anonymous said...

I always pay with a check. What I hate at the end of every year they want to double the cost saying my last years rate was a "promotion". After I threaten to cancel they give me the "promotional" rate again.

TLE said...

I wasn't going to participate in the auto billing any longer, I thought I would not update my new expiration date on credit card on file. Not sure how they got the new expiration date but they did. The last email I received from them was about a price increase, not requesting my new expiration date. I got an auto bill on my card, including a six dollar increase.

Trying to talk with a customer service representative is very aggravating. I re-signed up on line to manage my account not sure that will help. They can email you twice a week with offers and listener news, but they will not email you a statement or a receipt, I think its very deceptive.

Plus it impossible to cancel a subscription. I canceled a Sirius dash mount radio because my vehicle has a XM built in unit. To there credit they did shut off the dash mount unit and stopped billing me. Then I was flooded with all type of we want you back special offers, they even went as far as asking what I would be willing to pay to reactivate my old unit. I didn't need it, a year or so later I got an email saying they was going to reactive my old dash mount unit for so many days for free for a limited time, its been working now for at least nine months for free.

I'm happy with the content and programs they provide just not their customer service department or invoicing.

Jim_812 said...

I am one of those that have recently been billed excessively, but have yet to get on the horn and rectify. My last "contract" ran out a couple weeks ago and I had just started a two week "Free trial" with an offer to re-up for 6 months for $25.00. Before the first week of the free trial was over, my wife calls me from work and asks me why Sirius has hit her bank account for just over a hundred dollars.

I think I'll move this up the priority list and take care of it today.

That will be right after calling DirecTV, who is billing me extra for the Palladia Channel, although they are no longer broadcasting it due to the Viacom debacle.

KoHoSo said...

I haven't followed this too closely as it has now been a couple of years or so since I was a subscriber. However, I'm not surprised. I was with XM Radio and, to me, it seemed like everything associated with it from content to service went quickly downhill when they were allowed to merge with Sirius (which I thought was a very bad move as it left no true competition in the market). They must cut down a whole forest of trees every year to send me the constant mailers begging me to come back. While regular radio is terrible these days and, on the subject of this blog, NASCAR radio programming of any kind in the greater Los Angeles market exists only on one small station up in what we call the High Desert that can't reach LA proper, there's no way I would ever subscribe to Sirius again...and I would have said that even before reading today's article.

allisong said...

I've been a SIRIUSXM subscriber since 2007, and have paid with a monthly debit to my checking account all that time. There was only one hiccup a couple of years ago when they stopped taking the money out. I had to call them to ask why, and they told me they needed my new debit card expiration date. I gsve them the new date and there's been no problem since.

I also am signed up online with them to manage my account. It is fairly easy to look up your account status including when your next payment will be due/withdrawn.

The promotional tool of giving "X" months free and then charging is common in a lot of subscription based items, such as cable/satellite premium channels, magazines, etc. You would be pretty naive to think that you could enjoy the benefit for 3 months or so and then turn your radio off and you each go your separate ways never hearing from each other again, don't you think?

Hearing you say that it is difficult to cancel reminds me of the old AOL days back about 15 or 20 years ago. When you would call to cancel your subscription, they would run through a script of about 6 or 7 different options in order to keep you around. In the sales business, retention is king.

Jonathan said...

Glad I never signed up what a bunch of BS!

Mike in Pittsburgh said...

Bought 2 Sirius lifetime subscriptions about 7 years ago, only $1000 never have to deal with them again and I'm grandfathered into free online. My 2 newer cars that have XM built in never turned off when the free trial ran out. That was the best move I ever made looking at what has happened since the merger.

Matt T. said...

I'm glad you published this, JD. I'm going on vacation next week and was thinking about trying out the trial period while at the beach when I could listen extensively.

I'd rather not deal with any potential headaches. Think I'll read a couple books instead.

-- Matt

Shayne Flaherty said...

I subscribe to SiriusXM and have been a customer for over 6 years.

Never had any problems with billing or customer service.

During the merger with Sirius, XM was giving me 5 months for $20 deals that I renewed 3 times.

I've got their "everything" plan and can't live with out it.

MikeInRedondo said...

I had XM and now Sirius and I haven't had any problems. I pay for accounts for me and my parents (2 for me, 2 for them). We've killed a few radios or traded in cars over the years and I was able to terminate service with no problems. I'm sure some people have billing issues, but not everyone does. After using sat radio I don't know that I could ever go back to standard FM, when I'm in someone elses car it kills me to listen to over the air broadcasts.


Darcie said...

I made the huge mistake of purchasing the lifetime subscription to Sirius when I purchased my new car. After 9 months, I had so much trouble with the car, including needing a totally new transmission, that they took the car back and I got another. When I called Sirius to transfer the service to the new car, they refused, saying the subscription was lifetime for original car only. They wouldn't refund one dime, and they refused to cancel the service on the first car. So, if any fool bought my car, they're listening to Sirius on my dime.

I'm guessing Sirius is going to eventually be penalized the same way Capital One was today, by forcing them to give money back to customers because of illegal business practices.

Anonymous said...

I never had this problem with Sirius. I canceled my service a year or so ago without any trouble.

The only service I've ever had to terminate a card over is's free-trial-turned-subscription plan. They bill like $80 right off the bat for a full year, and good luck getting it back. Fortunately, Bank of America agreed with me that this amounts to a scam and recovered my money.

bobbydjr said...

You can count me as another subscriber, since 2001, that's never had a problem with XM. Two years ago, I dropped a subscription because my daughter decided she didn't want it anymore. It took one phone call and I never saw another charge for that dropped subscription again.

Anonymous said...

I'm in the camp of no issues to report. I have (4) radio subs - (2) lifetime and (1) 3yr renewal and a month to month on a company owned vehicle. I've transferred subs, replaced a couple dead radios - all without issue. They told me I qualified for the internet feed at no extra cost so I use that now as well. I just hate that they don't broadcast qualifying coverage anymore - there is only so much of the phone-in jibberish that I can stand, and listening to the MRN crew cover qualifying was relaxing and helped a long drive go by quickly (I'm a sales rep so lots of seat time in a 4 wheeler lol)

Steve in Raleigh NC

Jim_812 said...

Post script to my earlier post; I was able to get a pretty decent credit for the problem I had on my account. They didn't want to do give me anything in the beginning, but I wasn't about to let them railroad me after being a customer for nearly 10 years.