Aol To Reform Customer Service Procedures

Attorney General Spitzer today announced an agreement that requires the nation’s leading internet service provider to reform its customer service procedures.

Under the agreement, America Online (AOL) will alter the incentives it offers to customer representatives who seek to persuade subscribers not to cancel their service.

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

In response to approximately 300 consumer complaints, Spitzer’s office began an inquiry of AOL’s customer service policies. The investigation revealed that the company had an elaborate system for rewarding employees who purported to retain or "save" subscribers who had called to cancel their internet service. In many instances, such retention was done against subscribers’ wishes, or without their consent.

Under the system, consumer service personnel received bonuses worth tens of thousands of dollars if they could successfully dissuade or "save" half of the people who called to cancel service. For several years, AOL had instituted minimum retention or "save" percentages, which consumer representatives were expected to meet. These bonuses, and the minimum "save" rates accompanying them, had the effect of employees not honoring cancellations, or otherwise making cancellation unduly difficult for consumers.

Many consumers complained that AOL personnel ignored their demands to cancel service and stop billing.

The agreement requires AOL to:

  • Eliminate any requirements that its customer service representatives maintain a minimum number of "saves" in order to earn a bonus;
  • Record all service cancellation requests and verify action on the request through a third-party monitor;
  • Provide refunds to all New York consumers who claim harm based on improper cancellation procedures, up to four months worth of service;
  • Pay $1.25 million to the state in penalties and costs.
The claim form for New York consumers seeking refunds is available at Attorney General Spitzer's web site http://www.ag.ny.gov/bureau/internet-bureau.

Spitzer thanked AOL for working with his office to resolve the matter.

The case was handled by Assistant Attorney General Elizabeth Nieliwocki, under the direction of Kenneth Dreifach, who is Chief of the Attorney General's Internet Bureau, and with the assistance of Special Assistant Attorney General Gille Anne Rabbin and Investigator Vanessa Ip.

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