Attorney General's News Release

May 28, 1998

Nixon, 43 other attorneys general reach agreement with AOL to provide new protections for consumers

Jefferson City, Mo. — Missouri Attorney General Jay Nixon today announced that he and the attorneys general of 43 other states have reached a nationwide agreement with America Online, the country's largest Internet service provider. He said the agreement will provide important new protections for consumers, including advance notice of price increases or substantial service changes.

"AOL customers now will have more information at their disposal regarding their accounts and services and also will have more protection against the possibility of unauthorized purchases being made by children using the computer," Nixon said. The agreement stipulates that:

• If AOL increases its monthly fees or otherwise modifies its contract, it must provide clear and conspicuous notice of the change at least 30 days in advance. The notice is to be delivered by e-mail, a pop-up screen, or the U.S. mail. The notice will describe the change, state its effective date and direct the subscriber to an area where the change is described in greater detail. If such notice is not delivered, a subscriber is entitled to a refund on any price increase.
• AOL will provide improved online tools to prevent unauthorized purchases. These tools include restrictions on setting up sub-accounts for children and blocks of certain pop-up screens. Nixon said these measures are designed to help parents supervise or prevent their children from making certain online purchases.
• AOL will notify all consumers, via pop-up screen, when they enter a game or other premium service area where charges are incurred beyond the monthly fee. The pop-up box will state the rate per minute of the extra charges.
• Under the terms of AOL's "Free Trial Offer," the company must make new disclosures, including that the 50-hour free trial must be used within a month; that the consumer must cancel the trial to avoid billing; and that consumers should be careful to determine if AOL maintains a local access number in their area to avoid long-distance charges. If consumers cancel their AOL service, procedures will be explained clearly by AOL under "Keyword:Cancel" and "Terms of Service." AOL also must mail a notice of cancellation to the consumer.

"AOL reaches into millions of homes across America, and this agreement ensures their customers will be better informed about what they are paying for," Nixon said.

In addition to the new protections for consumers, AOL will pay a total of $2.6 million to the 44 states for legal costs and consumer education efforts. Missouri will receive $76,363.63 of this amount.

In January 1997, Nixon was one of 36 attorneys general who reached an agreement with AOL that provided refunds to customers who were unable to obtain online access after signing up for the company's unlimited access plan. As a result of the negotiations by the states since late 1996, AOL has paid $34 million in restitution to consumers nationwide.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to Press Secretary John Fougere.

E-mail      Phone: 573-751-8844         Fax: 573-751-5818