For all the exasperated customers who have tried to cancel some service or other to no avail, an explanation is at hand: A settlement agreed to today by AOL showed that sales representatives receive incentives to keep consumers from leaving.
AOL, the country's largest Internet service, agreed to pay $1.25 million in penalties and to refund the subscription fees of some customers after the New York Attorney General, Eliot Spitzer, accused the company of making it unduly difficult for customers to cease service.
AOL admitted no wrongdoing but said it would no longer tie bonuses to deflected cancellation requests. According to Mr. Spitzer's office, internal office brochures trumpeted how employees could earn a bonus as high as $3,115 a month by recording 975 "saves."
In New York, where Mr. Spitzer is hoping to become governor next year, AOL's customers and former customers can receive as much four months' worth of refunds if they tried unsuccessfully to cancel their service. To request repayment, they may contact Mr. Spitzer's office: http://www.oag.state.ny.us/internet/internet.html
"This agreement helps ensure that AOL will strive to keep its customers through quality service, not stealth retention programs," Mr. Spitzer said in a statement.
The penalties will hardly put a dent in AOL's earnings. The greater loss may be what apparently was an established way of keeping subscribers to its Internet service, which typically costs $23.90 a month. A subsidiary of Time-Warner, AOL has steadily been losing customers to faster and cheaper competitors. At 21 million subscribers, though, it is still the country's largest Internet service.
But as any consumer knows, AOL is not alone. Companies that offer all types of products - credit cards, magazines, health clubs, and newspapers, to name a few - are notoriously aggressive about preventing cancellations. Are they also pushing the line?
"This sends a message that we are aware of these business practices and will take action where appropriate," said Brad Maione, a spokesman for Mr. Spitzer's office.
Sell your soul to NY TIMES (Reg req)
AOL, the country's largest Internet service, agreed to pay $1.25 million in penalties and to refund the subscription fees of some customers after the New York Attorney General, Eliot Spitzer, accused the company of making it unduly difficult for customers to cease service.
AOL admitted no wrongdoing but said it would no longer tie bonuses to deflected cancellation requests. According to Mr. Spitzer's office, internal office brochures trumpeted how employees could earn a bonus as high as $3,115 a month by recording 975 "saves."
In New York, where Mr. Spitzer is hoping to become governor next year, AOL's customers and former customers can receive as much four months' worth of refunds if they tried unsuccessfully to cancel their service. To request repayment, they may contact Mr. Spitzer's office: http://www.oag.state.ny.us/internet/internet.html
"This agreement helps ensure that AOL will strive to keep its customers through quality service, not stealth retention programs," Mr. Spitzer said in a statement.
The penalties will hardly put a dent in AOL's earnings. The greater loss may be what apparently was an established way of keeping subscribers to its Internet service, which typically costs $23.90 a month. A subsidiary of Time-Warner, AOL has steadily been losing customers to faster and cheaper competitors. At 21 million subscribers, though, it is still the country's largest Internet service.
But as any consumer knows, AOL is not alone. Companies that offer all types of products - credit cards, magazines, health clubs, and newspapers, to name a few - are notoriously aggressive about preventing cancellations. Are they also pushing the line?
"This sends a message that we are aware of these business practices and will take action where appropriate," said Brad Maione, a spokesman for Mr. Spitzer's office.
Sell your soul to NY TIMES (Reg req)
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