Attorney General Jim Hood Announces Settlement with AOL
Regarding Cancellation Issues
From: Office of the Attorney General Filed 7/1/07
Jackson, MS- Attorney General Jim Hood today announced a settlement with
AOL requiring the company to make significant changes in honoring consumer
cancellation requests and further ordering refunds for consumers. The
settlement, entered into by Mississippi and 47 other states as well as the
District of Columbia, requires AOL to reimburse the states $3,000,000. Of
that amount, Mississippi will receive $45,000.
"This settlement resolves complaints in which consumers have had trouble
when they tried to cancel their AOL paid services," said Attorney General
Jim Hood. 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 website http: //cancel.aol.com.
The agreement further requires AOL, one of the nation's largest Internet
service providers, to make broad refunds to consumers who have complained
of unauthorized charges for AOL service. 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.
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, 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 Wisconsin, and Wyoming,
the Commonwealths of Kentucky, Massachusetts, Pennsylvania and Virginia,
and the District of Columbia.