Satellite radio service and streaming platform SiriusXM tacks on a more than 20 percent fee to consumer subscriptions without warning, falsely advertising its music plan prices lower than what it actually charges consumers, a new lawsuit alleges.
The so-called “U.S. Music Royalty Fee,” which SiriusXM charges, is 21.4 percent above the advertised price for the plans, and the company deducts it from consumers accounts without any notice in advertising or invoices and receipts, the lawsuit adds.
“Once consumers have been lured to sign up, SiriusXM prevents them from learning about its scheme by never thereafter sending them monthly or ongoing billing notices or invoices,” according to the lawsuit.
Cindy Balmores, Justin Braswell, Deborah Garvin, and Thea Anderson filed the proposed class action lawsuit against SiriusXM after they all discovered its scheme through an investigation that was published online. The group were all roped into their SiriusXM subscriptions through their car radios, and many had them for more than five years—paying the “U.S. Music Royalty Fee” without knowledge.
The group accuses SiriusXM of falsely advertising the prices of its music plans and not adequately disclosing to them that the U.S. Music Royalty Fee would be charged.
“Meanwhile, SiriusXM’s sign-up process, automatic renewal process, and policy of not sending monthly or ongoing billing notices or invoices are deliberately designed to prevent subscribers from learning of the U.S. Music Royalty Fee,” the lawsuit adds.
According to the lawsuit, SiriusXM is alone in charging such a fee, with Apple Music, Spotify, Amazon Music, Google Play Music all including the music royalty fee in their advertised music plan prices.
“Reasonable consumers would expect that the advertised price for SiriusXM’s music plans would include the fundamental cost of obtaining the permissions necessary to provide the music content that SiriusXM has promised is included in those plans. The U.S. Music Royalty Fee is, in fact, simply a disguised double-charge for the music plan itself,” the lawsuit states.
The group goes on to add that even the name of the U.S. Music Royalty Fee is deceptive, with SiriusXM falsely indicating that it is a government-related fee and even telling consumers it’s “government mandated,” which they argue it is not and is the standard fee that streaming providers must pay to share artists’ music.
The hidden fee has been the source of all of SiriusXM’s profits for the past several years, the lawsuit says, listing that in 2023, SiriusXM collected $1.36 billion in U.S. Music Royalty Fee charges, while the entire company had net profits of $1.26 billion. “In other words, in 2023, U.S. Music Royalty Fee revenues were equal to 108 percent of the net profits for the entire company.”
And while the consumers aren’t happy with the way SiriusXM has been charging the fee, they aren’t asking the company to get rid of it—they just want it charged fairly and disclosed in the subscription process and advertising.
SiriusXM has been hit with legal action over its business practices before. In December, New York Attorney General Letitia James filed a lawsuit against the company accusing it of trapping consumers in subscriptions with intentionally lengthy and cumbersome cancellation processes following an investigation.
And in July, an employee accused the company in a proposed class action lawsuit of failing to pay accurate hours, shorting workers on the time they spend before and after shifts using company devices.
In the Sirius XM hidden fees class action lawsuit, the plaintiffs are suing for violation of the Washington Consumer Protection Act, Florida Deceptive and Unfair Trade Practices Act, breach of the implied covenant of good faith and fair dealing. They want to represent SiriusXM users in Washington and Florida, and are seeking damages and injunctive relief.
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