AOL Settles Cancellation Policy Dispute

UPDATED America Online will pay $1.25 million to about 300 consumers in New York to settle a dispute over its cancellation practices. As part of the settlement, AOL has agreed to reform its customer service policies and ensure consumers have an easier time canceling its service.

The New York Attorney General's office said that AOL employees were ignoring requests to cancel and stop billing customers and the company continued to bill them. This was due to a reward program made available to AOL's customer service representatives.

"This agreement helps ensure that AOL will strive to keep its customers through quality service, not stealth retention programs," Attorney General Elliot Spitzer said on Wednesday.


Employees were eligible for a bonus if they we able to retain a set amount of customers. However, minimum retention percentages were put in place, causing some to make it difficult to cancel service or ignore the customer's request altogether.

The perks were lucrative to those who were successful. An employee could earn thousands of dollars in bonuses if they had higher than a 50 percent retention rate, according to the Attorney General's office.

AOL cooperated with the Attorney General and said it was happy with the outcome. Also, the company will provide up to four months of refunds to those who complained about AOL's cancellation practices.

"AOL is pleased to have reached an agreement with the State of New York on customer care practices that will increase quality assurance, and assist with the verification of certain member intentions online," AOL spokesperson Nicholas J. Graham told BetaNews.

The minimum-save requirement has been eliminated and all future cancellation requests will be recorded, as well as verified by a third party.

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