• Recommend:
• 0 Comments

AOL%squots Settlement Speeds Refunds

Online service's out-of-court settlement ends immediate crisis.

By Glen McDonald, PCWorld   

The program offers users cash refunds or a free month of credit, depending on how much time the user spent online during December and January. The announcement came one day before a deadline set by New York state attorney general Dennis Vacco. Vacco threatened to sue AOL for alleged deceptive business practices.

%dquotMake no mistake: This was not a bluff,%dquot Vacco said. %dquotI was fully prepared to swing the bat if AOL failed to provide customers with a meaningful plan to resolve the problem.%dquot

Chris Wolf, an attorney specializing in technology law with the firm Proskauer, Rose, Goetz, & Mendelsohn, LLT in Washington, D.C., said Vacco%squots deadline and the pressure from several other state attorneys general prompted the AOL announcement.

%dquotHe has the resources, the New York tax dollars, and staff ,%dquot Wolf said. %dquotThis was not an idle threat.%dquot

Although the refund program represents a clear a victory for consumers, Wolf added, the AOL situation could have been settled in the open marketplace.

The agreement heralds what AOL hopes is the end of a monthlong public-image nightmare. AOL%squots stock rose $2 Wednesday to close at $37.25 a share.

%dquotWhat AOL did was a good practical solutiontheir stock went up, it was a good PR move,%dquot Wolf said. %dquotIt ought to have a good atmospheric effect on any class-action suits as well. It suggests that these issues shouldn%squott be litigated, but resolved early on.%dquot