- The Washington Times - Tuesday, September 23, 2003


America Online agreed to settle charges of unfair marketing practices including billing subscribers after they asked to cancel and failing to deliver promised rebates, federal regulators said yesterday.

The Federal Trade Commission said AOL had “failed to implement appropriate measures to ensure that all customer requests for cancellation were properly executed.”

As a result, some subscribers who wanted to cancel were unfairly charged monthly service fees.

“No company should retain subscribers against their wishes,” said Lydia Parnes of the FTC’s Bureau of Consumer Protection. “When consumers cancel their service, they expect the billing to stop.”

The consent agreement calls for AOL to take “appropriate measures for ensuring that consumers’ requests for cancellation of such service or continuity program are promptly processed.”

In a separate matter, AOL agreed to tighten procedures for rebates after complaints about the $400 rebates to consumers who signed up for its CompuServe Internet service.

AOL promised that the rebates would be delivered within eight to 10 weeks or, in some cases, 45 days, but that the company “unfairly extended the time period in which they delivered the rebates to consumers, causing substantial injury to consumers whose rebates were not delivered within the time promised.”

“This type of offer can be very appealing, especially to consumers who otherwise might be unable to afford a computer,” Miss Parnes said.

AOL said the agreement settles a nearly 4-year-old probe into the CompuServe rebates as well as the more recent cancellation complaints.

“The agreement between AOL and the FTC does not contain any statements of wrongdoing or liability by the company,” AOL said in a statement. “It is also worth noting that, after reviewing the facts, the FTC decided not to impose any fines or monetary restitution.”

The largest U.S. Internet provider, which has been losing customers to high-speed and discount providers, has also been the subject of accounting probes by the Securities and Exchange Commission.

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