July 11, 2007

DC AG Reaches Settlement with AOL Regarding Customer Cancellation Requests

(Washington, DC) The Attorney General for the District of Columbia, Linda Singer, announced a settlement with AOL that requires the company to change how it handles requests from customers to cancel their Internet service and to provide refunds to consumers who complain of unauthorized charges.

The settlement, which was joined by the District of Columbia and 48 states, responds to complaints from consumers who had difficulty attempting to cancel their AOL service. The District's Office of the Attorney General was one of nine state attorney's general offices that led the multi-state effort.

AOL had limited the methods available for consumers to cancel their accounts, causing the majority of cancellations to be made by telephone. However, AOL's customer service representatives received incentives for retaining or "saving" customers instead of canceling their service, and many consumers complained that canceling their AOL service was difficult or impossible. Today's agreement places 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 their service.  More information is available at:

• Cancel AOL Service

The agreement further requires AOL to make 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 unauthorized charges to consumers, and will continue to cooperate with the states in these efforts. District of Columbia consumers with complaints about unauthorized charges by AOL should call OAG's consumer protection hotline, at 202-442-9828.

"Customer retention should result from a company's superior service rather than from its resistance to service cancellation requests," General Singer said. "DC consumers who were unable to cancel their AOL service will now have the opportunity they deserve to obtain refunds."

Today's settlement also addresses a number of other billing practices that resulted in 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.

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