AOL will pay $3 mil to states, refunds to consumers

By John O'Brien | Jul 11, 2007

Nearly every state in the country will benefit from a settlement reached Wednesday between them and America Online, one of the nation's largest Internet service providers.

AOL will pay a total of $3 million to 48 states and the District of Columbia and provide refunds to eligible consumers as a result of the agreement, which ends allegations that AOL made it too tough for customers to cancel their service contracts.

The attorneys general said AOL gave consumers were given limited alternatives to calling it directly to cancel, and when the customers did call, company representatives tried to convince callers to keep their contracts.

That will no longer be allowed, according to the settlement.

"Consumers should be free to cancel these contracts without feeling pressured to continue paying for a service or product they no longer want," Tennessee Attorney General Bob Cooper said. "We hope this agreement will help compensate those consumers who were inconvenienced by the alleged actions of some company representatives."

Also, the agreement requires AOL to revise its disclosures regarding reactivation of terminated accounts and its disclosures relating to accounts billed directly to a consumer's monthly telephone bill.

"Spin off" accounts -- additional paid accounts for AOL service that spun off from an original membership -- may now only be created during a recorded phone conversation.

The only two states to not participate in the investigation were Florida and New York.

"Because AOL made it nearly impossible to cancel accounts, consumers were often saddled with products they did not want." Maine Attorney General Steve Rowe stated. "This settlement forces AOL to adopt cancellation methods that are easy for consumers to use."

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