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Attorney General Larry Long Announces Settlement with AOL Regarding Cancellation Issues

Attorney General Larry Long Announces Settlement with AOL Regarding Cancellation Issues

PIERRE, S.D.- Attorney General Larry Long today announced a settlement with 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 resolves allegations by the states that consumers have faced difficulty and confusion in attempting to cancel their AOL paid services. 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 company also agreed to resolve outstanding complaints, facilitate a process for refunding consumers in the future, and continue to cooperate with the Attorney General.

Revision of other billing practices is also part of the AOL settlement. Disclosures regarding reactivation of terminated accounts and its disclosures for accounts billed directly to a consumer’s telephone bill will be required. AOL will also change its practice of allowing consumers to create "spin off" accounts from original memberships. Consumers now must call AOL to create these accounts and these phone conversations must be recorded. All costs must be disclosed to the consumer.

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 settlement requires AOL to reimburse the states $3,000,000. South Dakota will receive $45,000 as reimbursement for its attorney fees and costs.

If you have any questions regarding this settlement agreement contact the South Dakota Consumer Protection Division at 1-800-300-1986 or consumerhelp@state.sd.us.

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