Welcome to the
Hotel AOL

Where Customers Check In,
But They Don’t Check Out

by David Cassel
Boardwatch Magazine
July, 2000

One angry subscriber suggested AOL should simply re-write its slogan. “You’re so easy to use, it’s no wonder we’re number one.”

Is AOL retaining members against their will? Though AOL users love to chat sometimes, when they call to cancel their accounts, AOL won’t even answer the phone. And many users have reported that even after they’ve cancelled the accounts, AOL keeps taking their money.

It’s more than just annoying. Forty-four state attorneys general convinced AOL to sign a 50-point agreement in 1998 that addressed these very issues. But dozens of subscribers are now questioning whether AOL is upholding its end of the deal. Connecticut’s Attorney General Richard Blumenthal told Boardwatch that in January and February he received “somewhere between 25 and 50 complaints.” And a Boardwatch investigation reveals years of similar billing problems. AOL did not return our request for a comment.

Some of the state attorneys general are now back on alert. In the 1998 agreement, AOL promised to honor stop-service orders and “maintain adequate customer support operators to process cancellation requests in a timely manner.” Historically, AOL has had trouble answering its phones — so Massachusetts Assistant Attorney General Michael Hering, who was part of the executive committee that met with AOL, explained the way the agreement was supposed to work. “While you’re on hold they are supposed to play a message that gives you alternative methods of cancellation ... Instead of hearing music, you’re supposed to be hearing that.” (AOL also allows subscribers to cancel their accounts by sending a fax or letter.)

But that’s not what’s happening.


Former AOL user Rhonda Kuhnle described a completely different procedure when she called in November of 1999 to cancel an AOL account her 11-year-old son set up by mistake. A recorded message told her there were no operators to take her call; then it hung up. Her further efforts to cancel the account met with nothing but dead ends. Making matters worse, her credit card statement ultimately revealed her son had set up two accounts, both of which she was charged for. When she finally did reach the ISP, she agreed to pay the bill — as the price of finally being free from AOL.

Two months later Boardwatch discovered the same thing. Though there were times when Boardwatch got through, in a test call performed in January, an outgoing message announced no operators were available to accept the cancellation; then it hung up. AOL’s responsiveness hadn’t improved by March, according to an article in the Boston Herald. “Calling several times during working hours, we got only a recording asking to call again later,” reporter Robin Washington observed. Washington said that after his story ran, “I’ve had literally dozens of responses from consumers saying they experienced similar problems.”

Massachusetts’ Hering tried to investigate after the Herald’s article ran — but apparently AOL’s lack of operators applies even to its legal department. “I did contact AOL’s counsel about that issue,” he said at the end of April, “and this time they haven’t gotten back to me.” The lack of customer service operators recurred as recently as April 14, according to a subscriber who e-mailed his feedback to the “Why AOL Sucks” page.

In fact, it’s nothing new; AOL’s staffing woes go back as far as 1996. Years ago, one user said, “First their voicemail stated to press a number for canceling service, the response was all lines busy, call again.” But the user discovered AOL apparently performs triage on incoming calls, granting lowest priority to customers who want to leave. The user said, “I called directly back and pressed the number for reconnecting service — and got through immediately.”


There’s also a bigger problem. Dozens of other subscribers complain that AOL simply continues billing them after they have cancelled their accounts.

And that’s apparently been going on for years, too. A 1996 article in NetGuide prompted reader letters complaining about billing problems as far back as 1994. And in January of 1997, the San Francisco Chronicle cited yet another two customers who continued to be billed after canceling. “We’re about ready to shoot AOL,” a representative at one credit card company complained to the paper, reporting a flood of complaints from customers who’d tried unsuccessfully to cancel their accounts.

One former user said in June 1998, “We call AOL every time this happens and they claim they will close the account and stop billing us but then the telemarketers start calling every day asking us to re-join ... Notwithstanding our consistent refusals, the account is reactivated and the charges reappear on our credit card bill.”

In August 1998, one former user said, “They accessed my account after I tried to cancel four times ... My credit union charged me $20 for an overdraft fee.” In September of 1998, another former user said, “I’m three months and counting now and still have not managed to be fully cancelled ... Actually I started trying about five months ago ... someone either can’t do it, forgets to do it or the latest problem ... they forget to take off the extra charges on my credit card while those charges rack up more debt in finance charges.”

The attorneys general agreement — put in place in June 1998 — tried to address this by specifying that cancellations “shall be processed promptly and be deemed effective upon receipt.”

But the horror stories continue right up to the present. One former user said, “I have been trying to stop them from debiting my account since June of last year ... I asked for the address of their legal department and they said no.”


Some users also talk of checks bounced because of AOL’s withdrawals. Others resorted to canceling their credit cards to avoid AOL’s unending fees.

A few unfortunate souls who didn’t watch their credit cards carefully even complained that they discovered charges for AOL’s service years after they’d cancelled their accounts. One said the billing continued unnoticed for three years while he served in Kuwait. “After I returned I tried everything to recover my money to no avail: AOL hierarchy, Better Business Bureau, Federal Trade Commission, Comptroller of the Currency ... nothing helped. They still have $600 of my money.”

Another user had a similar story; he’d cancelled after two weeks, and “three years later I found out they had been taking money from my bank account without my knowing.” One subscriber even complained that AOL had been billing him for four years — “and is giving me a runaround about giving it back.”

A few AOL users complain they were mistakenly switched to the one-year-pay-in-advance plan, and are out over $239. Others say that not only were they over-billed, they were switched to AOL’s long-distance phone plan.

Kemberly Brooks, a former subscriber in Alaska, had an even stranger problem with AOL. “They sent us a digital camera in the mail just out of the blue,” she said. “They automatically took the money out of our checking account.” Brooks returned the camera, but nearly a year later, she said, “They still say we owe them the money, with some added fees for not paying the original amount.”


The 44 state attorneys general first began trying to address AOL billing problems in 1997 — but the situation was complicated by other issues. At the time, according to a study by Inverse Technologies, 80 percent of calls placed to AOL’s online service failed to connect.

Subscribers were furious in the second month after AOL moved to flat rate pricing in December 1996. “You have charged us up-front for a service you have no intention or ability to provide,” one user complained. One attorney filed a class action suit, joking to CNN that the situation “may be a novel way of venture capital being raised.”

But AOL’s shift to flat rate pricing brought another billing issue that seemed deliberate. AOL planned to switch every subscriber to $20-a-month accounts — in most cases, doubling their bills — without first getting permission. Articles about the “default doubling” approach prompted the states into action, says Michael Hering — and once involved, the state attorneys discovered they first needed to address subscribers who couldn’t even access the service they were being billed for.

Ultimately AOL not only backed off doubling the bills, it agreed to provide refunds for customers who’d had trouble accessing the service.

But this only exasperated the load on AOL’s call centers. Rather than simply granting the refunds, AOL required customers to phone AOL’s already understaffed phone lines to claim them. Many subscribers found that all the refund operators were also busy; others were required to wait on hold for up to half an hour. (Meanwhile, tests performed at that time showed that calls placed to open a new account were answered instantly.) AOL’s refund line greeted callers with cheerful pitches for its service. (“Thank you for calling America Online. We value your membership, and we’re working around the clock to prove it,” said the recording) But late-night callers were then told to call back later — during normal business hours!


It was after these crises that AOL signed the third assurance addressing problems with canceling accounts. “It’s kind of the equivalent of an out of court settlement,” Hering explained, noting that assurances work in conjunction with the consumer protection acts most states have on the books.

So what happens if AOL isn’t living up to the agreement? “A violation of an assurance is prima facie evidence that they have violated the Consumer Protection Act,” said Hering.

“If we can prove that they violated the assurance, then we can prove they violated the Consumer Protection Act —and if they have, they can be subject to fines of up to $5,000,” he said. In a worst case scenario, AOL could be fined $5,000 for every subscriber who experienced a problem covered by the agreement.

But when asked if that would happen, Hering stammered something about “limited resources.” “We have a hotline, a consumer 800 number that people can call, where they can report ... We get some 130,000 calls a year, so you can imagine that we can’t investigate and prosecute every case, so we have to prioritize them.” Hering refers subscribers with AOL billing problems to the state’s Consumer Complaints and Services Bureau.

Connecticut’s Attorney General Richard Blumenthal said he was able to resolve all the complaints he’d received, but “If they are not complying with the agreement, we certainly would take action.” The agreement went into effect in June 1998, and since the dozens of complaints in January and February of this year have already been addressed, “The question is whether there’s a pattern involving a sufficient number that constitutes a violation of the agreement ... Anyone who has knowledge of problems should contact my office or the attorney general in their state.”

Users who continue to have trouble reaching an AOL operator to cancel their accounts — or who continued to be billed after completing the cancellation procedure — can reach Blumenthal at richard.blumenthal@po.state.ct.us, or by phone at (860) 808-5314.


Ultimately the pattern of problems may have its roots in AOL’s own policies. Two former employees told Boardwatch about the conditions at AOL’s Irving, Texas, facility in 1995, where the workers — some as young as 16 — were said to be badly supervised.

If there was a computer problem, requests to cancel service were written on paper to be entered into the system later. One of the former staffers remembered that at least one employee would instead take a handful of the cancel requests, “and throw them in the trash to get out of working.”

As AOL grew, it replaced that facility with one in Jacksonville, Florida. At this point the wait on hold was lasting as long as an hour, the Contra Costa Times reported in November 1995. (And users were still being billed after they’d cancelled their accounts.) AOL’s spokeswoman told the paper that “We are aware of these problems,” adding — “We do recognize the need to continue to ramp up our customer service organization.”

The problems continued, but instead of fixing them, AOL tinkered with the cancellation process to its own advantage. In January 1997, AOL’s vice president of member services told The Wall Street Journal that AOL established an area where customers could cancel their accounts online in February 1996.

By June 1996, the company discontinued it, because “We found that our cancellation rate was going up considerably,” the vice president said. One particularly damning statistic from the Washington Post shows that in one three-month period in 1996, 1.7 million AOL subscribers cancelled their accounts. At the time, AOL had only 6 million subscribers.

Now AOL urges users to talk to a live operator. “In many cases, 20 percent of the people decide not to cancel after talking to us,” Steve Case commented in a 1996 press conference. But it’s partly because AOL pays the operator taking the call a bounty if she talks the subscriber into staying.

Several reps have said AOL even had a high quota for the percentage of canceling subscribers they were required to dissuade. One rep even forwarded a memo he said was distributed acknowledging the financial incentive to mis-state the customer’s intention. “‘Gaming’ might slip by undiscovered temporarily,” it conceded, “or it might be discovered on the first occurrence. Why take the risk?”

The bounty system encourages AOL’s operators to resist requests to cancel accounts. A common tactic involves reminding users that they can’t get a refund for the unused portion of their monthly fee. One ISP staffer shared his coworker’s story about “the AOL rep who answered ‘Oh, we just billed you yesterday! You might as well keep the account for the next month since you are going to have to pay for it!’” When he called back to check the account’s status exactly two weeks later, he was told again “Oh no! We just billed you yesterday!”

Another subscriber reports receiving the same line last May. And in January, a third remembered an operator “trying to make it sound like she couldn’t cancel from there.” Some of AOL’s operators simply offer subscribers a free month of time if they’ll remain on AOL for an additional month.

An in-house memo urged the phone representatives, “With a little enlightenment, most people will realize the benefit of retaining their AOL account.” While it’s impossible to prove whether AOL’s system of bounties is ultimately responsible for the subscribers who report their billing continued after they’d cancelled their accounts, it’s certainly one possibility.


Though AOL’s operators are now supposed to provide a confirmation numbers with the cancellations, not all users are aware of this — and with a phone conversation, there’s no record of whether the cancellation was made.

One former user said his credit card company advised him to cancel his account by sending a certified letter, so there would be tangible evidence that the cancellation had taken place.

Other users have resorted to making their own record. In 1998, one user claimed his uncle found a way to beat AOL’s billing in court. “Their [AOL’s] comment was, ‘We never got the call,’ but he recorded the call, because he’d heard of cases similar.”

Former subscriber Michael Ipock describes a similar conclusion to a desperate billing situation. “The charges kept going ...!! It even caused my credit card to go over the limit and cost me nearly $250.” Ipock says he spent 20 minutes on hold waiting for a manager — who was rude and unhelpful. But then he took his recording of the call to his credit card company. “Within 30 days AOL was happily crediting back all of their charges and even all my over-limit and late fees. They even gave me six months free service.”

AOL’s own outgoing message says it may record incoming calls — which, in theory, grants customers the same privilege. But the Boston Herald’s reporter noted that AOL refused to talk to him in March when he informed the operator they were being recorded. Similarly, in a test call in April, the representative we spoke to consulted her supervisor — then told us she’d been advised to hang up.

But one of the most common complaints users have is even more basic: simply locating the phone number to cancel accounts — (888) 265-8008 — is difficult. Some tell of deleting AOL’s software only to realize they can no longer access the keyword “Cancel” to get the number. It’s included on the phone numbers page at AOL.com — listed eighth in a series of 10 numbers. But it’s not provided when you click on the page’s “Canceling Your Account” link. Instead, you’re advised to go to keyword “Cancel” on AOL — where you’ll then find the same phone number displayed further down the page.

The mailing address and fax number for cancellation notices don’t appear at all on the Web page. Users who wish to cancel their accounts can write AOL at P.O. Box 65100, Sterling, VA 20165 — or fax (703) 433-7283. The requests must include the user’s full name, phone number and address — plus either the billing contact’s AOL screen name or the last four digits of the credit card number or checking account used on the account.

AOL’s Keyword Cancel does include all the relevant information — though it’s first preceded by some extraneous additional suggestions. (“For help with a technical problem, please go to Keyword: Help. If you would like to review other America Online pricing plans, as low as $4.95 per month for three hours, select the Pricing Plans button below. If you wish to discuss or cancel your membership with one of our Member Services Representatives ...”) Michael Hering points out that AOL is now required to include contact information on all promotional floppy disks it distributes.

Some users mistakenly believe they won’t be billed if they stop using the service before the 30-day trial period ends — though, in fact, the billing is on by default. But even after completing the cancellation procedure, Mark Busnelli was upset to discover that he could never fully sever his ties with AOL. “Even when you cancel your AOL account, they hound you endlessly ...” he said. “On and on and on they call. From every conceivable department, they all have your phone number ...”

Suck.com co-founder Carl Steadman once joked that the lesson of AOL’s merger with Time Warner was clear: “Send out enough pieces of direct mail and you, too, can own the world.”

But the floppy disks are only the beginning of a business relationship. Millions of users are affected even more by what AOL does at the end of the relationship. Consistently, AOL’s policies — and errors — favor AOL. And the problems have been going on for years. As the complaints continue, subscribers must be starting to wonder whether AOL is, indeed, really thinking "You're so easy to use, it's no wonder we're number one!"

David Cassel is the editor of the AOL Watch mailing list (www.aolwatch.com/list/). The California-based freelance writer has also written articles for Slashdot, Wired, MSNBC, Salon and Suck. He can be reached at david.cassel@aolwatch.com.