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July 27, 2007
AOL to Refund Washington Consumers for Billing Disputes

SEATTLE –Attorney General Rob McKenna today announced that Washington consumers who continued to receive bills for America Online (AOL) services after cancelling are eligible for refunds as part of a $3 million nationwide settlement with the Internet service provider.

Washington, along with 47 other states and the District of Columbia, recently reached the agreement with AOL concerning the company's cancellation policies. AOL, based in Dulles, Va., agreed to refund consumers who complained about unauthorized charges for services received since January 1, 2005, and to reform its cancellation policies to make it easier for subscribers to cancel their subscriptions.

So far, more than 35 Washington consumers have filed complaints with the Washington Attorney General’s Office and will receive refunds from AOL.

“Consumers have a natural expectation that when they cancel a service, they will no longer be billed,” McKenna said. “With this agreement, AOL agrees to not only resolve existing consumer complaints, but to establish policies that prevent problems in the future. The changes will make them a better company.”

Historically, AOL’s primary service has been dial-up Internet access, typically offered through a free trial offer that requires consumers to cancel their accounts to avoid a monthly membership fee. AOL announced in August 2006 that it would begin limiting its role as an Internet access provider, allowing customers to convert to free e-mail accounts.

Prior to the states’ settlement, AOL only allowed customers to cancel their service by fax, mail or telephone. The majority of consumers called AOL directly and wound up speaking with service representatives who earned incentives for persuading customers not to terminate service. Consumers complained that this practice of trying to save customers made cancellation extremely difficult if not impossible. The settlement puts strict limitations on the practice of saving customers and requires recording and verification of these telephone calls. In addition, consumers are now able to easily cancel service online at

The agreement addresses a number of other billing practices that the states believe created consumer confusion. The company will clearly disclose how terminated customer accounts are reactivated. Customers must now resubmit any payment information before AOL can reactivate a paid service.
AOL will also clearly disclose the exact charge that will be placed directly on a customer’s monthly telephone bill. And the company will significantly revise its practice of allowing consumers to create “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.

The Attorney General’s Office will receive $45,000 of the settlement total for attorneys’ fees and costs.

Consumers who have not already received refunds may file a complaint with the Attorney General’s Office online or call toll-free 1-800-551-4636 between 10 a.m. and 3 p.m. to request a complaint form. Complaints will be forwarded to AOL, which will refund consumers directly.

AOL Assurance of Discontinuance

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Media Contact: Kristin Alexander, Media Relations Manager, (206) 464-6432


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