AOL settles case with 44 states
The online service reaches a settlement with 44 state attorneys general, promising clear information when changing prices or services.
Ending a two-year investigation by attorneys general that resulted in three monetary settlements, AOL also agreed to pay the states $2.6 million to cover investigative costs and future consumer protection and education efforts.
Among the terms of the agreement, AOL promised to make clear in its "Free Trial Offers" that the 50-hour free trial must be used within a month.
In the past, consumers were upset for being charged for monthly service after the 50-hour period had expired. They said the online service did not properly warn them they would be charged automatically.
AOL also promised it would disclose the cost of its toll-free access number with a pop-up screen that also gives an option for the user to disconnect without incurring any charges. In the past, consumers had filed complaints to attorneys general claiming they were not given proper notification that they would be charged for telephone access when they dialed the service using the toll-free number.
In April, New York's attorney general said he was investigating the toll-free number, for which members were being charged $6 per hour.
An AOL spokeswoman said the pop-up window had been in place for the past year.
In January 1997, AOL agreed to give refunds and online time to members who were locked out by busy signals after AOL switched to flat-rate pricing and members swamped the service.
AOL also refunded customers who felt they were overcharged when the online service automatically switched them from lower-priced plans to a flat-rate price plan of $19.95 per month.
"They were reactions to immediate problems where action was needed to stop the bleeding. In this case, it's more preventive medicine," Corvette said.
In July 1996, AOL also settled a class action suit, separate from the attorneys general investigation, in which the online service agreed to give refunds to members who felt they were overcharged by AOL's old hourly fees.