AOL Settles Multi-State Suit

America Online, Inc. today
agreed to pay $2.6 million to settle a suit involving 44 U.S. states that charged AOL with misleading subscribers when advertising its services.

The announcement was made by Pennsylvania Attorney General Mike Fisher who
said the states’ two-year investigation into AOL’s advertising and sales of
services was effectively over when AOL today signed the “Assurance of
Voluntary Compliance” agreement. The 44 attorneys general wanted to see if AOL violated states’ consumer protection laws.

Specifically, charges brought against AOL included: advertising flat rate
service fees and not announcing other telephone charges to customers
outside local calling areas; advertising “free trial offers” that were not
always free; and advertisements that claimed phone access numbers for
connection to the service were all local.

The suits also alleged that AOL made automatic changes to users’ service plans and in monthly fees without notification, and made unauthorized charges to users’ credit cards and/or bank accounts for services and goods.

As part of the settlement, AOL agreed to notify subscribers of changes in
fees or contracts with an advance 30-day notification, disclose phone
charges used when dialing into the service, and provide secure procedures to guard against unauthorized charges.

A statement from the Pennsylvania Office of Attorney General said today that AOL instituted corrective changes to its service prior to settlement of this case and denies any wrongdoing.

Today’s agreement is the third settlement between AOL and the state of Pennsylvania since 1996. Including today’s settlement, AOL has reportedly paid a total of $34 million in restitution to subscribers.

Other states represented in this case were: Alabama, Alaska,
Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Idaho,
Iowa, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland,
Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada,
New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio,
Oklahoma, Oregon, Rhode Island, South Carolina, Tennessee, Texas, Utah,
Vermont, Washington, West Virginia, Wisconsin and Virginia.

“As this new technology moves to the mainstream, it’s important that
consumers are given the same types of safeguards and protections they
currently have in the purchase of other goods and services,” Fisher was quoted as saying. “This agreement provides those protections without stifling the industry’s growth.”

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