AOL Settles Charges of Unfair Billing

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America Online Inc. says it will improve the way it deals with customers who want to cancel their Internet service, resolving federal allegations that the company used unfair billing practices.

The Federal Trade Commission settlement announced Tuesday also requires AOL and its subsidiary, CompuServe Interactive Services Inc., to keep promises for delivering rebates for online services.

The FTC released a complaint with the settlement accusing AOL of continuing to bill its subscribers after they asked to cancel their accounts.

"No company should retain subscribers against their wishes," said Lydia Parnes, deputy director of the FTC's Bureau of Consumer Protection.

AOL said in a statement that it had worked with the FTC to resolve the matter for four years before the release of the official complaint and settlement.

"The company has always made, and continues to make, exceptional customer service and customer satisfaction a top priority," the statement said.

News source: Newsday - AOL Settles Charges of Unfair Billing

AOL, a unit of AOL Time Warner Inc. based in Dulles, Va., noted that the agreement does not contain any fines or admissions of wrongdoing by the company.

The settlement requires AOL to ensure that cancellation requests are promptly processed and billing stops after a request is received. The company also will begin mailing confirmation letters to customers who inquire about canceling service but change their minds. Those customers who ultimately decide to cancel can mail or fax an enclosed form back to AOL.

The FTC also said AOL and CompuServe failed to deliver timely rebates to consumers. The companies promised a $400 cash rebate toward the purchase of a computer if consumers signed up for three years of CompuServe at $21.95 per month. The companies said the rebates would be delivered within eight to 10 weeks, and in some cases, 45 days. But the FTC said the companies unfairly extended the time in which they delivered the rebates.

AOL and CompuServe agreed to deliver rebates on time and provide them within 30 days if no time is specified. The FTC approved the agreement with a 5-0 vote. The settlement will be subject to public comment for 30 days before becoming final.

AOL Time Warner shares rose 10 cents to $16.23 in Tuesday trading on the New York Stock Exchange.

#1 timdorr on 25 Sep 2003 - 03:02

I accidentally overused my dads AOL account dialup access while I was without broadband for a month. We have a broadband-only account, so they only include 300 minutes of emergency dial-up (for downtime). I went quite past this and built up a charge of $160. However, one quick call to AOL and it was removed from our bill and the issue resolved. Hardly "unfair"

(3 replies) #2 zidane_genome on 25 Sep 2003 - 05:08

I was a customer of AOL before I got broadband. When I canceled my service, they offered me another month for free. I told the guy on the phone politely, "I have broadband internet now, I don't need dialup anymore". He insisted that I could cancel in a month. I told him "I am canceling NOW, not in a month, but RIGHT NOW!". I look at my next month's bank statement, AOL charged me TWICE IN THE SAME MONTH!! Once on the 4th, and agian on the 17th!!!! I went through the roof! I called up their "customer service" line, and kept getting the free month deal over and over... I had to call the BBB, and get a new credit card number so I wouldn't be charged. Just to see if it would work, my old user name and password still works, and it's been a little over a year!! At least I know I have a free backup if my cable goes out!

#2.1 roadwarrior on 25 Sep 2003 - 11:08

I used to work for Time Warner Cable at the time of the merger, and all of the employees were given free AOL accounts, which were supposed to expire when we left the company. I left TWC about two months later. Needless to say, over 2 years later it still works. Often I think this is how AOL comes up with its vastly overstated number of "members". They simply keep accounts around like this that they can count, even though they are not being used.

#2.2 shinma on 25 Sep 2003 - 14:54

A "member" is someone who actually gave AOL money in a particular month, so Overhead and Internal accounts are not counted as "members". Your former supervisor's lack of attention to detail in leaving your account open doesn't constitute AOL intentionally "vastly overstating" their membership as an organization, so enjoy the freebie and don't worry about it, man.

#2.3 roadwarrior on 25 Sep 2003 - 18:20

I still believe that accounts like mine and zidane_genome probably get counted when AOL counts up their member numbers. If you go by some of AOL's counts of their members, about 1/6 of the internet population of the world is on AOL.

#3 yayaba on 25 Sep 2003 - 08:04

My dad try to cancel after we were subscribers for years. When my dad called they gave him free offers for 3 more months but my dad just said no.

Turns out the month after that he got charged. Furious he called again and they said they would cancel his account.

Funny thing is our accoutn worked for about 6 more months and we didnt' get charged a cent

#4 Glen on 25 Sep 2003 - 17:11

This practice has been going on since the birth of AOL over 10 years ago. I just can't believe it has taken this long to actually get something done about it. I used AOL back in the days of MS-DOS (no windows) and from what I've seen, not much has changed.

#5 dyl4n on 25 Sep 2003 - 19:49

The same stuff happened to me. I got one of those "Free 1 month" AOL cd's and I used it for the month and then when I wanted to cancel, the guy I talked to wouldn't let me. He just kept saying he's going to give me another free month and no matter what I said he still wouldn't let me cancel. After I got off the phone, A few months went by and then I got a bill for around $75.00 even though I hadn't used AOL since I called to cancel. I called AOL about the bill and they told me that if I used my credit card to pay, they would take the bill down to $21.95 but only if I used a credit card. AOL's just insane. I can't believe people actually use it. They charge outrageous prices and they have that stupid window that you can't close without being disconnected from the internet. I advise anyone reading this NOT to sign up with AOL. Not even for the free month.

#6 Conundrummm on 26 Sep 2003 - 00:37

I never really had that problem with AOL. But, I have had that happen with other isp's. Heck, those crooks at Brigadoon.com charged me for a month after I cancelled and never has given me a refund. First they claimed bankcruptcy, then they bought another ISP out and still didn't pay. Talk about a bunch of thieves.

Now AOL, they were great. They just give out free months like it's candy. I bought my first computer in Feb. 1998. I was using AOL for free through like October or November. Everytime i'd try to cancel, they'd offer me another free month. Or they'd say "because we had an outage last month, we're giving everyone a free month." Or they'd offer me 3 free months is I said I was leaving them for another ISP. I'd say over the last 5 years, 3.5 were spent on AOL for free. They turned bad this year and I had to actually cancel out the free months that came with my new computer. Maybe they're overcharging people now because they can't get customers to stick with their over-priced, under-performing service.

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