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AOL TO PAY STATES $3 MILLION AND REFUND WISCONSIN CUSTOMERS IN SETTLEMENT OVER CANCELATION ISSUES

 

MADISON - Wisconsin consumers who tried to lawfully cancel their AOL Internet service provider accounts, yet continued to receive monthly bills that they could not get AOL to properly resolve because of the company's customer retention tactics, will receive refunds under the terms of a multi-state consumer settlement joined by Attorney General J.B. Van Hollen.

 

Complaints were filed by 177 consumers with the state against AOL (America Online), and many will be eligible for refunds. The company has begun contacting consumers directly by mail. The Wisconsin Department of Justice (DOJ) will receive copies of and monitor all correspondence. AOL has also agreed to pay the participating states $3 million for costs and fees. Wisconsin's share of the settlement is expected to be approximately $45,000.

 

"This settlement successfully addresses a widespread problem related to AOL's practices impeding service cancellation, and I'm very pleased Wisconsin consumers will be refunded for their losses," Van Hollen said.

 

To learn more about DOJ consumer protection actions, visit the DOJ Web site by clicking here.

 

AOL, one of the nation's largest Internet service providers, must now make significant changes in honoring consumer cancellation requests. The settlement, which was filed by Wisconsin and 47 other states (listed below) as well as the District of Columbia, resolves complaints in which consumers have alleged difficulty and confusion in attempting to cancel their AOL paid services.

 

AOL formerly limited the methods available for consumers to cancel their accounts, such that the majority of consumers attempted to cancel by directly calling AOL. Customer service representatives received incentives for retaining or "saving" customers in lieu of cancellation, and consumers complained that as a result, cancellation was extremely difficult if not impossible.

 

Today's agreement puts strict limitations on this practice and requires recording and verification of these telephone calls. In addition, the agreement expands consumers' options by allowing them to cancel through a simple online method via the AOL Web site.

 

In addition to resolving any outstanding complaints, the company will be adopting an ongoing process of refunding consumers for unauthorized charges, and will continue to cooperate with the states in these efforts.

 

The Wisconsin Department of Agriculture, Trade, and Consumer Protection assisted in the investigation of this case, reviewing the approximately 177 complaints.

 

Today's settlement also addresses a number of other billing practices that created consumer confusion. Specifically, AOL will be revising its disclosures regarding reactivation of terminated accounts as well as its disclosures relating to accounts billed directly to a consumer's monthly telephone bill. AOL will also significantly revise its practice of allowing consumers to create "spin off" accounts - which are additional paid accounts for AOL service stemming from one original membership. These accounts can now only be created over the phone in a recorded conversation with a customer service agent, who must make detailed disclosures of the applicable costs.

 

AOL recently announced that it would begin limiting its role as an Internet access provider, allowing its customers to convert to free e-mail accounts. The terms of today's agreement should minimize the potential for consumer confusion during this transition.

 

The other participants in today's settlement are the states of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia, and Wyoming, the Commonwealths of Kentucky, Massachusetts, Pennsylvania and Virginia, and the District of Columbia.

 

Assistant Attorney General Cynthia Hirsch represented the State of Wisconsin in the proceedings.