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AOL Settles Over Halting Accounts
by Michael Martinez
America Online, one of the largest Internet service providers in the country, reached a settlement with states that will require the company to issue millions of dollars in refunds and improve how it processes cancellation requests.
Attorneys general from 48 states and the District of Columbia on Wednesday announced a settlement with AOL over complaints the states filed about the company's account termination policies. AOL has avoided going to court by agreeing to the terms of the settlement, which include paying the states $3 million.
According to the prosecutors, AOL limited how customers could cancel their accounts and provided incentives for customer-service representatives to retain clients. In the settlement, they alleged that some customers were billed for months after they thought they had canceled their services and that others were pressured to maintain their accounts by AOL representatives who promised a month of free service.
Illinois Attorney General Lisa Madigan said in a statement that the settlement will help consumers take advantage of AOL's new free e-mail services and convert or transfer their Internet service accounts without much hassle.
"In this agreement, we insisted that AOL put in place a framework that resolves existing consumer complaints and establish clear policies and procedures to prevent these problems in the future," Madigan said.
As part of the settlement, AOL will have to allow customers to cancel accounts online. The company also will have to revise how it creates "spin-off" accounts for customers who register multiple screen names to a single account and minimize the steps customers must take to transfer to free e-mail accounts. AOL now will only be able to create spin-off accounts after agents have recorded telephone conversations with customers.
Florida, Verizon Tackle Phone 'Cramming'
Florida Attorney General Bill McCollum on Tuesday announced an agreement with Verizon Communications to implement an "early-warning" system to keep third parties from placing unauthorized charges on telephone bills.
McCollum said Verizon will head the initiative to prevent third-parties from "cramming" charges onto bills without customer knowledge or consent. Merchants and billing clearinghouses will have to forward all cramming complaints to Verizon, which will take action against the parties identified if enough complaints are logged over the course of a month.
"Unfortunately, victims of cramming often don't realize they are being improperly billed until they have been paying the charges for a significant length of time," McCollum said in a statement.
While serving as state attorney general last year, now-Gov. Charlie Crist launched a cramming investigation into Email Discount Network, a company that was later accused of charging hundreds of thousands of customers after they used shopping coupons advertising discounts. The firm agreed this year to pay restitution that is expected to exceed $1 million.
In other news, technical glitches kept tens of thousands of West Virginians offline this week. Equipment failures experienced by the firm FiberNet knocked out Internet service for as many as 20,000 customers in the Charleston and Huntington areas. Service was restored for most customers by Thursday, but investigators are still planning to probe the matter.
Patrick Pearlman, a lawyer at the state's Public Service Commission, told The Charleston Gazette on Thursday that he expects FiberNet will be sued and that investigators soon will launch a "full-body" search into the outages.
Ohio Revises Estimate On Scope Of Data Breach
Ohio Gov. Ted Strickland on Wednesday said that a data breach disclosed in June is twice as large as what investigators originally estimated.
Strickland announced that a data tape stolen from a state intern's car contained personal information on more than 850,000 people. He said investigators recently discovered that data on an additional 560,000 individuals with uncashed state income-tax refunds also is on the tape, as is information on 14,874 people who did business with the state.
The state is planning to contact all those listed in the most recent announcement by mail and has created an online tool for people to search for their own names to determine if they were affected by the breach, Strickland said. Potential victims have been given access to free identity-theft and protection services.
Investigators still have not discovered any evidence that the lost data has been abused. In a statement released Wednesday, Strickland's office said that is "highly unlikely."
The tape was stolen from an intern at the Ohio Administrative Knowledge System, which had regularly been sending data tapes home with employees for security purposes. Strickland since has moved to bar state offices from doing so.
Hugh Quill, the director of the Administrative Services Department, told AP this week that the state could spend as much as $2 million on ID-theft services and other expenses related to the incident.
Gov. Corzine Declares Executive Privilege On E-Mail
New Jersey Gov. Jon Corzine said in a court filing this week that e-mails exchanged with his ex-girlfriend are protected by executive privilege.
Republicans have sued to obtain messages he exchanged with Carla Katz, the president of Communications Workers of America Local 1034, during labor talks last year. The state GOP contends that the messages should be made public under the state's open-records law.
The Star-Ledger reported this week that Corzine asserted executive privilege in documents he filed in state court, arguing that the e-mails are private and not subject to public-records requests. Corzine insisted that his electronic conversations with Katz did not influence his thinking during labor negotiations.
The New Jersey State Republican Committee claims the e-mails, even though they were sent on private accounts, are public records because he was discussing state business. Corzine's office has blocked requests to obtain the e-mails. Corzine has been asked to appear in state superior court next month to explain why the requests were denied.
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