SAN LUIS OBISPO, CALIF. — For years, Sirius XM has turned to its customer retention department to keep its churn level as low as possible by offering existing customers deep discounts off the “rack rate” for an annual subscription. There are also free trials for new users of the satellite radio service.
For one California man, those promotional rates are unfair, as they don’t justify the “regular” pricing structure at Sirius XM. As such, he’s suing the New York-based company in Federal court.
As first reported by Matthew Keys at TheDesk.net, Bakersfield-based Joseph Enriquez this week filed a complaint in a federal court, accusing SiriusXM with engaging in “unlawful and unfair marketing and advertising practices.”
How so? Sirius XM charges some subscribers as much as $22 a month for streaming and satellite radio services while offering a substantial discount to other subscribers.
Most new customers eligible to receive a premium satellite and streaming radio subscription for around $60 a year — just $5 per month. However, the customer retention department will more than often extend this opportunity to retain existing subscribers, and Enriquez is steamed over that widely reported situation.
As Enriquez sees it, full-rate customers of SiriusXM are at a disadvantage when they pay the normal rate for service. He also argues that it is hard to learn of promotional or discounted rates for current subscribers because SiriusXM doesn’t advertise them.
However, these rates are technically not promotion — they are customer retention department-authorized credits.
For Enriquez, doing away with the practice and extending the lower rates for all is desired. “As a result of [SiriusXM]’s business practices, Plaintiff has suffered an ascertainable loss of money, including, but not limited to, out-of-pocket costs incurred in paying non-promotional rates at times when he did not immediately contact [SiriusXM] customer service agents to obtain new promotional pricing,” the complaint says, according to TheDesk.
Enriquez originally filed the lawsuit in California court in July. It was moved to the federal level in early August given Sirius XM’s corporate locale.
