Attorney General Gansler Announces Settlement with AOL
Company will modify its cancellation and retention practices

BALTIMORE, MD (July 11, 2007) - Maryland Attorney General Douglas F. Gansler announced today that his Consumer Protection Division has entered into a settlement with AOL requiring the company to change its policies to honor customer cancellations and provide refunds to consumers.

The settlement, which also includes the offices of Attorneys General from 47 other states, resolves allegations that AOL made it difficult for consumers to cancel the service and refused to honor consumer cancellation requests. 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 to cancel their accounts by allowing them to cancel through a simple online method via the website http://cancel.aol.com.

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 resolving consumer complaints concerning improper charges.

Today’s settlement also addresses a number of other billing practices that the states alleged harmed consumers. 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 change its practices related to the creation of “spin off” accounts - 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 today’s agreement should minimize the potential for consumer confusion during this transition.

“A business cannot continue to bill consumers who have exercised their right to no longer receive a service from the company,” said Attorney General Gansler. “This settlement will allow consumers to cancel their AOL accounts and not be billed after cancellation.”

The settlement further requires AOL to reimburse the states $3,000,000.

The other participants in today’s settlement are Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Washington, West Virginia Wisconsin, and Wyoming, the Commonwealths of Kentucky, Massachusetts, Pennsylvania and Virginia, and the District of Columbia.