Sirius XM Canada subscribers paid illegal drip pricing, alleges B.C. class action lawsuit (2024)

Sirius XM Canada overcharged its subscribers through drip pricing, or the illegal addition of hidden fees before checkout, that increased the price 10 to 20 per cent, alleges a proposed B.C. class action lawsuit on behalf of all Canadian subscribers.

The lawsuit, filed in B.C. Supreme Court this week, comes a month after Sirius agreed to pay the federal Competition Bureau a $3.3 million penalty under a law that increased penalties for drip pricing considered false or misleading under the Bureau’s deceptive marketing rules.

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Drip pricing offers a price for a product or service that is “unattainable” because of a second price that includes a mandatory fee that a consumer has to pay to complete the sale, the Bureau says.

Violators could be fined an amount set by the court and even be jailed for up to 14 years if the case is pursued as a criminal matter, the Bureau said. In civil proceedings, corporations face penalties of up to $10 million for a first offence, according to the Bureau.

The Bureau also said a company could be forced to pay restitution to customers.

Seeking damages equal to the amount of fees paid by class members is the goal of the proposed class action, which names Matthew Weinstein as representative plaintiff, according to the lawsuit in B.C. Supreme Court.

Weinstein purchased a music and entertainment subscription plan through sirius.ca on April 13, 2023, and was charged “music royalty and administrative fees” of $1 for the first month and $3.61 a month after that, fees that weren’t disclosed until the end of the purchasing process, the lawsuit alleges.

It says he and all class members were offered the plans at certain prices on the website, but when they went to complete payment, they learned of a mandatory fee, meaning they “received less value than they had expected.”

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“Consumers are entitled to clear and precise information and should never be surprised by hidden or additional fees,” said Matthew Boswell, commissioner of competition in a statement when the agreement was reached with Sirius.

The Bureau said on its website that it has taken action against drip pricing for many years under the Competition Act, notably in the car rental and online ticketing industries, and it encourages consumers to report examples of deceptive marketing claims.

“The Bureau’s intervention sends a clear message to the marketplace that these types of business practices will not be tolerated,” Anna Maiorino, a bureau spokesperson, said in an email.

“The Sirius penalty is the highest since penalties were raised in 2022.”

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