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TRENTON
– Attorney General Anne Milgram announced
today that New Jersey has entered into a
multi-state settlement agreement with AOL,
one of the nation’s largest Internet
service providers, requiring the company
to significantly change the way it handles
customer cancellation requests.
The settlement resolves allegations that
AOL made canceling its Internet service
so confusing and difficult that consumers
were often unable to complete the cancellation
process, or were discouraged from trying
to do so. The Virginia-based AOL formerly
offered few service cancellation options,
which resulted in most account holders seeking
to cancel by telephone. AOL’s telephone
customer service representatives received
incentives for retaining or “saving”
customers who attempted to cancel.
The multi-state settlement agreement puts
strict limitations on AOL practices related
to cancellations, and requires the firm
to record and verify cancellation-related
telephone calls. In addition, the agreement
expands consumers’ options by allowing
them to cancel their Internet service through
a simple, on-line method via the Web site
http://cancel.aol.com.
“This
is an important outcome for New Jersey consumers,”
said Attorney General Milgram. “As
a result of this settlement, AOL customers
who seek to cancel their Internet service
will find the process simpler and more straightforward.
In addition, AOL will now provide greater
accountability regarding account cancellation
transactions and billing practices.”
The settlement agreement addresses a number
of AOL billing practices that in the past
have created confusion. Specifically, AOL
will be revising its disclosures concerning
the reactivation of canceled accounts, as
well as its disclosures relating to accounts
billed directly to a consumer’s monthly
telephone bill.
The settlement also requires AOL to pay
refunds to consumers who have complained
of unauthorized charges for service. In
addition to resolving any outstanding complaints,
the company has agreed to adopt an ongoing
process of refunding consumers for unauthorized
charges, and will continue to cooperate
with the participating states in these efforts.
“Canceling
or correcting a billing issue with an online
service should be as straightforward as
signing up for the service,” said
Stephen B. Nolan, Acting Director of the
Division of Consumer Affairs. “We
are confident that this multi-state resolution
will protect New Jersey consumers.”
AOL will also revise its practice of allowing
consumers to create “spin-off”
accounts, which are additional, paid accounts
for AOL service stemming from one original
membership. The settlement agreement requires
that these spin-off accounts be created
over the telephone in a recorded conversation
with an AOL customer service agent, and
that agent must provide detailed disclosures
regarding 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
multi-state settlement agreement should
minimize the potential for consumer confusion
during this transition.
In addition to New Jersey, 47 other states
and the District of Columbia participated
in the settlement. Deputy Attorney General
Cathleen O’Donnell of the Division
of Law’s Consumer Fraud Prosecution
Section handled the matter on behalf of
the State. Consumers who have questions
or concerns regarding the AOL settlement
agreement can contact the Division of Consumer
Affairs at 800-242-5846
(New Jersey only) or at 973-504-6200.
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