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Attorney General Jim Hood Announces Settlement with AOL Regarding Cancellation Issues
From: Office of the Attorney General   Filed 7/1/07   GCN

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.


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