AOL reaches deal with states

SAN FRANCISCO – Averting a looming court battle over how it has handled the exodus from its Internet dial-up service, AOL has agreed to make it easier for its remaining customers to leave as part of a $3 million settlement with 48 states and the District of Columbia.

The resolution announced Wednesday was driven by a deluge of complaints from AOL customers who said they tried to close their accounts, only to be thwarted in their attempts or discover they were still being billed for services that they thought had been canceled.

The outcry triggered a multistate investigation that would have culminated in a lawsuit if AOL hadn’t agreed to ante up and change its ways, said David Tiede, a deputy attorney general in California. New York and Florida were the only states that didn’t participate in the inquiry.

AOL, the Internet division of Time Warner Inc., didn’t acknowledge any wrongdoing in the settlement. As part of the settlement, AOL agreed to maintain an online channel for processing cancellations. Although it has long been one of the Internet’s best-known companies, AOL didn’t set up an online cancellation system until last August. Previously, all cancellation requests had to be made by fax, mail or telephone.

The settlement requires AOL to issue refunds to consumers who can show they were still charged monthly fees after trying to cancel their services.

The $3 million settlement will be divided among the 48 states and the District of Columbia to cover the costs of their inquiry into AOL’s practices and finance other consumer protection efforts.