Kentucky's Office of the Attorney General recently announced a settlement with America Online (AOL), one of the nation’s largest Internet service providers, requiring the company to make significant changes in honoring consumer cancellation requests and further ordering refunds for consumers.
The settlement, known as an Assurance of Voluntary Compliance, was filed by Kentucky and 47 other states as well as the District of Columbia, and 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, and a 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. The 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 Web site http://cancel.aol.com.
The agreement further requires AOL to make broad refunds to consumers who have complained of unauthorized charges for AOL service from January 1, 2005 to today. Consumers who have not already received refunds may file a complaint with the Attorney General’s Office of Consumer Protection by downloading a form from its Web site at http://ag.ky.gov/consumer/complaints/ or by calling 1-888-432-9257, Option 3. 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 recent 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 the agreement should minimize the potential for consumer confusion during this transition.
The settlement further requires AOL to reimburse the states a total of $3 million, of which Kentucky will receive $45,000 toward its costs of investigation.
The other participants in the settlement are the states of Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, Wyoming and the District of Columbia.