David
Cassel
(destiny@cloud9.net)
Mon, 19 Jun 2000 09:29:00 -0800
A O L A S S A U L T ~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~ Is AOL's merger with Time Warner in trouble? Early this morning the European Commission announced a four-month anti-trust investigation, according to Reuters. "News of the inquiry is likely to have big repercussions in Europe and the U.S.," the London Times added. http://biz.yahoo.com/rf/000619/l19410358.html http://www.the-times.co.uk/news/pages/tim/2000/06/19/timbizbiz01013.html AOL appears concerned about the merger's chances. They hired New Jersey telemarketers to work round the clock phoning AOL's 100,000 shareholders asking them to support the merger, according to the Washington Post. (Even the telemarketing firm's Vice President conceded the move was "definitely outside the norm.") But AOL also mailed 3 million glossy brochures, according to the Post, and sent peppy e-mails to their share-holding employees. The Post believed AOL's "unusually aggressive tactics" were to counter obstacles to the merger which included a large drop in AOL's stock price "and persistent questions from regulators on both sides of the Atlantic." http://www.washingtonpost.com/wp-dyn/articles/A1206-2000Jun15.html But there's an additional force that stands in AOL's way. Friday AOL faces a vote at their shareholders meeting on whether the merger will happen. The Post reported the unique way AOL's stock has been distributed means that "public shareholders as a block have the power to derail AOL's bid to buy Time Warner" -- and it's not just a hypothetical scenario. The Post notes that the only comparable communications merger, between Lycos and USA Networks, was blocked last year by just such a shareholders vote. And many AOL investors don't like the idea of acquiring Time Warner. Business Week quotes one AOL shareholder who says "I feel betrayed." http://www.businessweek.com/2000/00_04/b3665006.htm Ballots mailed to shareholders already default to a 'No' vote if they aren't returned, and one shareholder response firm told the Washington Post that when the vast majority of people receive their ballots, "they look it over and throw it away." It could be as simple as that. An industry analyst told the Post the possibility that the merger would be delayed is "very real." But AOL's legal troubles don't end there. Friday Erroll Trobee, a former AOL staffer, received the go-ahead from an Arkansas judge for his breach-of-contract suit against AOL. Trobee filed his charges against AOL in 1993. ( http://www.aolwatch.org/parker.htm ) A settlement was reached -- after AOL was found in contempt of court -- but now Trobee says AOL isn't honoring the terms! Trobee filed new motions, and he told AOL Watch the judge approved a pre-trial hearing in August with a trial scheduled for October. AOL also paid a $3.5 million fine in May over SEC regulations. AOL had "violated the reporting and books and records provisions of the federal securities laws," according to an SEC press release -- listing eight reasons why AOL's business model didn't justify the practice! http://www.sec.gov/news/press/2000-63.txt But there's one threat that AOL's executives can't seem to address: hackers. Several hundred screen names have been compromised, according to two AOL watchdog web sites. http://observers.net/crisreply.html http://www.inside-aol.com AOL told the Washington Post that they'd only learned about the breach when the Observers.net web site published a report on it. And Sunday night Kelly Hallissey, one of the site's staffers, told AOL Watch that she believed hackers were still accessing the database. http://washingtonpost.com/wp-dyn/articles/A9476-2000Jun16.html http://www.observers.net/insideview.html Reuters credited the attack for "highlighting the vulnerability of even the world's largest Internet services provider to the threat of hacker attacks." One hacker told the Post that for anyone who digs behind AOL's pretty interface, "there is a lot of stuff you can compromise." http://cnnfn.com/2000/06/16/technology/wires/aol_wg/ http://news.cnet.com/news/0-1005-200-2091566.html http://www.zdnet.com/zdnn/stories/news/0,4586,2589679,00.html AOL's spokesperson told MSNBC they were "taking steps" to eliminate the hole. ( http://msnbc.com/news/421768.asp ) But this may be a concession that the problem isn't fixed yet -- at least, judging from one earlier incident. In January hackers discovered a way to access any AOL Instant Messenger account (if it didn't have a corresponding AOL account.) AOL immediately told reporters at Wired News, C|Net, and MSNBC that they were deploying patches to fix AIM security problems. http://news.cnet.com/news/0-1005-200-1530654.html http://www.wired.com/news/business/0,1367,33881,00.html http://www.thestandard.com/article/display/0,1151,9111,00.html But they didn't. In February a Chicago computer consultant lost control of his AIM account to a malicious attacker. And another webmaster says the same thing happened to him in April. http://www.salon.com/tech/log/2000/03/27/aim/index.html http://www.kenton.org Ironically, the account in the April incident belonged to a user who had himself posted an unreleased 6.0 version of AOL's software on his web site -- "to point out to AOL and its users how weak its security is." After C|Net reported on the leak, the software was removed from the site, but the page now points users to two sites with additional information. "In another massive security lapse, by America Online Inc., we now have AOL 6.0 Beta," the second one claims. http://www.openaol.com/ http://www.techpages.com/aol6.htm http://news.cnet.com/news/0-1005-200-1956865.html http://news.cnet.com/news/0-1005-200-1980986.html http://www.kenton.org/nomore.htm Critiques of AOL's security have even worked their way into AOL's content. U.K. subscribers playing a Football Manager game in their sports area discovered a surprise when checking on their team's standings on May 26. They found that ranked #5 was a team called "How secure is AOL?" The #4-ranked team was named "AOL is nothing but kiddie porn." http://www.aolwatch.org/football.htm Three weeks later, the area hasn't been repaired. Instead, AOL has replaced it with an announcement that the rankings are "temporarily unavailable." Clicking on the "Current Rankings" link at aol://4344:845.ytbtop.7315005 brings up the announcement -- along with pictures of two angry men, one holding his head in his hands. The ongoing security problems are fostering suspicion among some users. "About two weeks ago I was called by buy.com about a $1,000 purchase made with my credit card that only AOL had," one AOL Watch reader wrote Sunday. "I denied the purchase and immediately cancelled the card. I also left AOL the next day." But hackers have been hitting AOL in various ways for the last five years. In 1995 a hacker told the Wall Street Journal hackers had been distributing customer credit card numbers they'd accessed in AOL's chat rooms. It was also in 1995 that hackers first accessed AOL's "CRIS" customer database, according to Nicholas Ryan, who served a six-month home sentence for writing a program which granted unlimited free access to AOL. "I actually used 'Online Cris' to determine if anybody was a narc who hung out in 'Mac warez'," Ryan remembered in 1997. http://www.wired.com/news/culture/0,1284,3309,00.html http://www.aolwatch.org/list/0051.html In 1996, the Florida Times-Union reported an AOL customer service staffer pleaded guilty to grand theft -- and implicated two other AOL employees. Bogus online messages had conned AOL users out of their credit card numbers, which were then used to purchase over $30,000 in computer equipment. http://www.aolwatch.org/ccaol2.htm http://www.aolwatch.org/list/0033.html In 1997 a security hole allowed hackers to view any subscriber's credit card number if they'd obtained the subscriber's AOL password -- though AOL's security chief had originally insisted this was impossible. In 1998 C|Net reported AOL's customer service representatives were surrendering accounts to "social engineering" hackers who'd provided only the name and address of an AOL account-holder. Even rock star Trent Reznor complained that a female fan had hacked his AOL account. http://news.cnet.com/news/0-1005-200-329662.html http://www.aolwatch.com/list/0095.html http://news.cnet.com/news/0-1005-200-329685.html http://www.mtv.com/news/headlines/980601/story3.html In fact, by May of 1998 the Village Voice had reported that using stolen passwords, "teenagers illegally accessed the accounts of thousands of unsuspecting AOL customers as well as employees of the online giant." Recently one webmaster claims to have infiltrated a ring of professional spammers operating with stolen AOL accounts -- and in so doing, "I also recovered over 1300 usernames and passwords stolen...from customers of AOL." http://belps.freewebsites.com/TheStory.htm http://premier.cluelessfucks.com/ AOL Watch has confirmed that since 1997, hackers have altered at least 35 AOL areas. http://www.wired.com/news/technology/0,1282,9932,00.html http://www.aolwatch.org/hacks.htm But millions of AOL's former subscribers may find themselves affected by another set of mistakes that have already sparked legal actions on several fronts. It stems from a very common activity: cancelling your AOL account! AOL Watch editor David Cassel discovered how tough that was in January: AOL's outgoing message simply announced no operators would take the call; then it hung up. Users report receiving the same response as far back as November, and the Boston Herald's Robin Washington had the same experience in March. In addition, "I've had literally dozens of responses from consumers saying they experienced similar problems," Washington told AOL Watch in March. http://www.BusinessToday.com/techpages/buy03142000.htm It's not just annoying; the practice also violates an agreement AOL signed in 1998 with 44 state attorney generals. "We're going to be investigating exactly what is happening," Connecticut Attorney General Richard Blumenthal told the Herald in March. "If there has been a breach of the agreement, it would constitute an unfair trade practice carrying a penalty of $5,000 for each violation, plus possible restitution for the consumers that have been harmed." http://www.bostonherald.com/bostonherald/lonw/aol03152000.htm Even after users reach AOL's operators and cancel their accounts, many report that AOL simply continues billing them! Blumenthal told AOL Watch he'd received several dozen complaints, and though he's succeeded in resolving most of them, "we'd be prepared to look into other complaints if we're made aware of them... Anyone who has knowledge of problems should contact my office or the attorney general in their state." Blumenthal can be reached by phone at (860) 808-5314 -- or via e-mail at Richard.Blumenthal@po.state.ct.us. AOL Watch editor David Cassel -- destiny@aolwatch.org -- is also collecting stories from users who've had problems cancelling their AOL accounts. And last week Massachusetts Assistant Attorney General Michael Herring also gave his office's hotline to the Boston Herald, stating that "We take any allegations that AOL is violating the assurance seriously." ( http://www.bostonherald.com/news/local_regional/buy06122000.htm ) A class action suit was also filed on June 8 by a California attorney, seeking restitution and punitive damages for California customers "for the time and money they expended" trying to get their money back. "AOL deceives the public into believing that it will cease charging subscribers' credit card and bank accounts upon cancellation of their subscriptions," the suit states, "when in fact AOL has a practice of continuing to impose such charges after the subscriptions are cancelled." AOL places a quota on the number of cancellations their operators are required to dissuade -- and in at least one internal document, AOL acknowledged the possibility that employees might intentionally mis-report their results. ( http://www.aolwatch.com/list/0091.html ) Whatever the reason, the billing problems have been going on for over four years, attorney Ken Richardson told USA Today. ( http://www.usatoday.com/life/cyber/tech/jk061300.htm ) "Our claim certainly is that this is a deliberate practice," Richardson told AOL Watch. To speak to him about his suit, phone (510) 451-6770, FAX (510) 451-1711, or e-mail KPR@marionsinn.com. Richardson also challenges AOL's Terms of Service contract, which specifies lawsuits against AOL must be litigated in Virginia. "The inclusion of this unconscionable provision in the subscription agreements constitutes an unlawful and unfair business practice," his suit argues. In an interview last week with The Standard, Richardson states that a subscriber might have a claim for a very small amount, and "AOL is telling them, if you want to sue us, you have to hike all the way across the country to Virginia." http://www.thestandard.com/article/display/0,1151,15952,00.html But it's just one of four class actions currently pending against AOL. A February suit charges that version 5.0 of AOL's software disables many users' ability to connect to the internet with any other service. ("First it was Time Warner, now it's your computer," read one newspaper's subhead, under the headline "Upgrade of Death.") The Standard reported class actions had been filed by lawyers in California, Washington, New York, Arizona, New Jersey and Oregon. http://www.thestandard.com/article/display/0,1151,15952,00.htm http://www.the-times.co.uk/interface/insight/archive/story86.html http://www.internetnews.com/isp-news/print/0,1089,8_216641,00.html http://www.wired.com/news/business/0,1367,34584,00.html A Florida attorney filed a separate class action in February because AOL's software defaults to a toll call for many subscribers without telling them! The suit accuses AOL of "using unfair trade practices, fraud and misleading advertising," according to the Kansas City Star. (The paper reports that an 11-year-old in Kansas City ran up $3,190 in phone charges in one month!) Subscribers have been complaining about the problem since at least 1995 -- and it appears to be widespread. According to the Star, a Southwestern Bell billing manager in Topeka "said the company has too many complaints from AOL customers to waive charges." Last year in New England AOL tried to shift the blame to phone companies -- but both Maine and New Hampshire public utilities officials challenged AOL's position. http://www.usatoday.com/life/cyber/tech/ctd719.htm Lance Harke, the attorney who filed this class action, can be reached at 1-888-823-8220. Meanwhile, a fourth class action lawsuit filed on behalf of AOL's remote staffers moved into depositions in May, according to one of the plaintiffs -- and the Department of Labor began investigating AOL's relationship with those volunteers in 1999. http://www.observers.net/cas_details.html http://www.observers.net/insight.html But ultimately AOL deserves all the legal action its gets, according to a recent column by ZDNet's Jesse Berst. "The world will be a better place if we all sue AOL. As soon as possible. There's ample evidence that Steve Case and AOL are bullies." http://www.zdnet.com/anchordesk/story/story_4467.html Berst explained his reasoning in a March 7 editorial, citing the Department of Justice's long struggle to wrest concessions from the Microsoft corporation. "Microsoft proved bullies don't reform until taken to court," Berst argues. "So I say sue AOL now. Let's not wait 20 years for the Department of Justice to figure things out." THE LAST LAUGH Fielding phone calls about hackers apparently caught AOL's technical support staffers off guard. "I've been seeing on the news that hackers have compromised AOL accounts," one customer asked. "Is that true?" The staffer replied, "I think so. Yeah." Then he hung up. David Cassel More Information - http://www.aolwatch.org http://cbs.marketwatch.com/archive/20000616/news/current/commentary.htx http://www.upside.com/Chris_Nolan/393e88320_yahoo.html http://www.macnelly.com/editorial_images/macnelly_edtoon050200.html http://www.news.com/Perspectives/Column/0,176,127,00.html http://www.suck.com/daily/96/08/14/ ~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~ Please forward with subscription information. To subscribe to this list, type your correct e-mail address in the form at the top of the page at http://www.aolwatch.org/list -- or send e-mail to MAJORDOMO@AOLWATCH.ORG containing the phrase SUBSCRIBE AOLWATCH To unsubscribe from the list, send a message to MAJORDOMO@AOLWATCH.ORG containing the phrase UNSUBSCRIBE AOLWATCH. ~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~++~
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