Subscription Bill for $11.83 Brings $5 Million Award

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A bill for $11.83 led a customer to file a federal class action accusing XM Satellite Radio of illegally renewing subscribers' contracts without proper notice. Damages are estimated at more than $5 million.

On behalf of all XM subscribers in New York, Richard Vacariello claims XM violates New York General Obligations Law §50903 by failing to notify subscribers 15 to 30 days before "automatically" renewing their subscriptions.

Vacariello took a 3-year subscription and used it in a leased automobile, then turned in the car and let the XM subscription expire - he thought. After he turned in the car, he says, XM sent him a bill for $359.64. (It is not clear from the complaint whether this was a bill for another year or for another three years.) Vacariello says he objected, and that XM told him it had "automatically renewed the contract."

So Vacariello says he canceled the contract "immediately," only to have XM send him another bill - for $11.83 - for the period after the 3-year contract expired, and before he canceled the automatic renewal.

Vacariello says XM refused to cancel the $11.83 bill, so he paid it under protest, for fear of harming his credit. Then he filed this class action. He estimates class damages at more than $5 million. He demands compensatory damages and an injunction.

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