Metroland Online - Features

During the summer of 2002, 24-year old Emily Geery accepted one of the ubiquitous free trial offers of online service from America Online. When the proffered three-month free membership expired, she called to cancel the service but was persuaded to remain for an additional three months. She says she didn’t want it, but the AOL representative was persuasive, and after all, it was free.

In September, when Emily was leaving from her New Mexico home for Costa Rica to work as a Peace Corps volunteer, she called AOL again to cancel her service but was badgered about her reasons. “They asked me about 10 times why I wanted to cancel, and somehow going to a developing country where I wouldn’t be able to use my free service wasn’t satisfactory,” she recalled. Finally, they agreed to cancel the account, but that November Emily discovered that her credit card was being charged despite her rigorous efforts to end service in September.

She explains the cancellation scenario she encountered: “When I called to straighten it out, they refused to believe that the service had ever been canceled, and I had no confirmation number to prove it. I must have spoken with three or four representatives before they finally agreed to nullify the charges and cancel my service. They were difficult, and I would never use their services again.”

Susan Nye of Clarksville was more than eager to share her infuriating attempts to cancel AOL. Initially, Nye’s 15-year old son signed on for free hours with his parents’ admonition that he must cancel at the end of the allotted time or accept responsibility for payment. He dutifully canceled before the free hours were used.

Five months later, Susan took a careful look at her credit card bill and noticed that AOL had charged her for each of the five months after cancellation. She immediately contacted them. “Oh, no problem,” the representative told her. “We’ll credit your account.” The next month, her card did not reflect the credit. She called again and was told again, “Oh, I’m so sorry. They never logged it in. I’ll do it for you.” The next month, no credit again. After at least two more fruitless calls during which she had to retell the entire story, she finally canceled by fax and letter.

Then, Nye went to the top. She wrote a detailed letter to AOL’s CEO and expressed her frustration. “I told him how this was poor service and said I will never do business with AOL again, and I’ll make sure everyone I talk to knows about this.” Within days someone from the company called her. “He was very polite and very apologetic. He said the company would be talking to the cancellation representatives to give them a reprimand,” she says. He also told her that “the CEO really wants to prevent issues like this from happening.” While Nye was impressed with the prompt response, she was not completely convinced of AOL’s sincerity. “There’s a method to their madness,” she concludes.

The experiences of Geery and Nye are not unique. It seems that, short of dying, there’s nothing America Online considers a valid reason for its customers to terminate service.

Stanley Hadsell of Troy is not shocked to hear these cancellation story nightmares because he has seen the AOL machine from the inside. In 1998, he worked as a technician in their Albuquerque center.

What part of Costa Rica don’t you understand? Emily Geery.
Photo: Leif Zurmuhlen

Hadsell enjoyed working in the call center, where 1,000 people filled the room, one half devoted to cancellation calls and the other to technical assistance, each employee fitted with headphones and a computer. Working conditions were good. Perks were earned depending upon performance and a willingness to be “gung ho.” The company gave T-shirts to employees who met basic goals, and senior employees were rewarded with stock options for higher levels of performance. Hadsell says he regretfully left his job after four months due to family matters.

The cancellation portion of the call center in Albuquerque is called the “save department.” Although any employee could effect a cancellation, customers are always funneled to the save department, to the specially trained save employees. Due to the sheer volume of callers to the center, for either cancellation or technical support, the customer is put on hold for an extended period, which can make the process time-consuming. Many people just give up before their calls are answered.

Employees earn a cubicle in the save department only after an extensive training period in customer persuasion. They are taught role-playing and other techniques to encourage people to stay connected, and they are authorized to offer inducements such as two or three free months of service. “They never wanted you to talk about canceling to the customer who wanted to cancel,” Hadsell explained. Another trick AOL employs is reactivating the account the minute someone signs back in, sometimes a family member who is not aware of the cancellation. Then the cancellation process begins all over again.

Hadsell recalled that some representatives were nicer to the customer than others. “AOL allows a wide range of freedom in how employees represent the company. Some people would be in their own little world inside that cubicle. I would walk by and listen to how people were being very sweet and kind, and in the next cubicle sarcastic and mean. It depends on the person.” Bonuses are duly awarded. For example, an employee with a high save rate could be rewarded with a trip to Acapulco.

After seven years as an America Online customer, Hadsell decided to switch to a competing Internet service because he felt it was more integrated with his Macintosh. His story is uncannily familiar: “I thought I had canceled,” he recalls. “I didn’t pay attention to my bank statement and missed that for two months they had continued to bill me. I called and said, ‘This is my third time calling. I canceled but I’m still being billed.’ The save rep was hostile. No record existed of my prior cancellation. I told him, ‘You’re not going to ‘save’ me because you’ve pissed me off. End my account right now.’ He gave me my cancellation number so fast I didn’t get it. I asked him to repeat it and he became more hostile. I asked for a written confirmation, which I received a week later. I feel it is my personal duty to convince people to quit AOL. I felt like they were devious.” To this day he keeps his cancellation records, just in case.

Others interviewed for this article expressed similar frustration, outrage, and feelings of being assaulted by the rude and coercive tactics of the AOL phone representatives.

No federal or state laws are in place that specifically address the behavior of Internet service providers; however, New York state law prohibits fraudulent and deceptive business practices. General Business Law, Article 22-A, section 349 states: “Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful.” Although the legal teeth exist to prevent deceptive behavior commonly exhibited by AOL, so far, the company has been able to elude state controls.

Brad Maione, a spokesman for the office of New York State Attorney General Eliot Spitzer, says the office receives complaints on a regular basis from people who have experienced difficulties when they tried to cancel their AOL membership. “A lot of AG’s around the country have had a lot of chatter in this regard,” he adds. Maione would not comment specifically on any cases Spitzer is now working on, but confirmed they are aware of this specific problem.

In May 2003, state Sen. George Maziarz (R-North Tonawanda) sponsored S. 4994 on behalf of Spitzer. According to a spokesman in Senate Majority Leader Joseph Bruno’s office, the bill stated that when a company offers a free-trial period for its services, the company must terminate the services at the end of the free period unless the company receives a written request from the customer to continue the service. The bill passed in the Senate but not in the Assembly, where it did not move out of committee.

Out of the belly of the beast: Stanley Hadsell.
Photo: Leif Zurmuhlen

According to Kelly Simon, legislative director for Assemblywoman Audrey Pheffer (D-Queens), the bill required what is known as a double affirmative. Assembly members met with lobbying groups who were opposed to the bill because they claimed it required the customer to give double consent, once when accepting a free offer, then again if the customer decides to continue with the service or membership. Simon explains that the lobbying groups, who represent businesses that use free offers as a marketing tool, want the Assembly to fine-tune the bill to eliminate the double-consent requirement. They prefer that a company notify consumers when the free-trial offer ends at which time they can opt out, Simon says.

Members of the Assembly and Senate have yet to iron out these subtle differences. Although the bill has not been formally reintroduced yet, Simon says she expects that it will, and that once again, Pheffer will sponsor the bill in the Assembly.

Maione says the attorney general is considering reintroducing S. 4994 for the 2005 legislative session.

Bob Sparks, a spokesman for Florida Attorney General Charles Crist, says his office has received 134 calls concerning problems with AOL, but he did not know how many dealt with cancellation problems. Chapter 501 of Florida law prohibits unfair and deceptive trade practices. Sparks said when the attorney general receives a complaint, someone from the office contacts the consumer representative with the company accused of deceptive behavior and asks them to “take appropriate action to satisfy the customer.” Although Sparks says he is aware of problems with AOL, he was not aware of the magnitude.

Litigation is familiar terrain to AOL, even if it has not led the corporation to change in its business practices. On the Web site www.cancelrefund.com, a description of pending lawsuits is aptly titled Welcome to the AOL Cancellation Settlement Website. Two class-action lawsuits against AOL deal specifically with cancellation problems. In Clough v. AOL and Mendoza v. AOL, it is alleged that when subscribers attempted to cancel their subscriptions as outlined in the terms of service, AOL sometimes “failed to process the cancellation request or reactivated the subscription after the cancellation as a result of a third party, such as a family member or friend, used the account without authorization.” According to the Web site, AOL denies the allegations, but in an effort to avoid the expense of litigation, it agreed to settle and paid the $3 million in plaintiff’s attorney’s fees. The settlement promises up to four months of refunds at $21.95 a month for customers who completed the required forms by the December 2004 deadline.

Jon Sorensen, a spokesman for the New York State Consumer Protection Board, says that half of the complaints he has received regarding AOL have addressed cancellation of service. People have filed complaints with the board when requests to cancel their account were ignored, and AOL continued to charge them. The board has been successful in obtaining refunds for those customers. “Our consumer assistance unit will file on the consumer’s behalf a request for a refund, which AOL should have listened to in the first place,” he explains.

Susanna Montezemolo, a policy analyst at Consumers Union in Washington, D.C., advocates for people primarily in telecommunication and media issues. Consumers Union is the nonprofit publisher of Consumer Reports. She says that consumer protection laws are regulated by the state, and that people who feel wronged by a business should complain to their state attorney general, their congressmen and state senators. She concedes, however, that “in the present Congress, it’s difficult to get anything passed that’s good for consumers.”

Montezemolo acknowledges that AOL has a strong market share as it successfully sells itself as the simplest ISP to use. However, “A customer has the right to cancel if they want to,” she flatly states.

The aggressive marketing techniques AOL uses have become a more prevalent problem in the larger telecommunications marketplace. “The telecom marketplace consists of these big companies with a lot to gain and individual consumers who don’t complain,” Montezemolo laments. “They just pay. It’s just easier to stay with AOL. It’s the little guy versus the big company.”

Further, the shrinking competition in today’s marketplace is disastrous for the consumer. Montezemolo points out that 98 percent of Americans have access to only one cable company.

Complaints lodged with the Consumer Protection Board confirm that telecommunication problems exist across the board. Sorensen says he receives complaints ranging from billing, service and “everything in between” for cable television, cell-phone companies and other telecom industries. One complaint that has repeatedly crossed his desk involves a satellite television service that requires the customer to retrieve a small tubular device, which is part of the satellite dish, which is often located on the rooftop, and return it to the company. Only upon receipt of this obscurely placed piece of equipment will the company cancel service. Cell-phone complaints include customers stating that they are being billed for services they never ordered. Also, people are riled up about the hefty cancellation fees for early termination of cell-phone service—even if the reason for canceling is due to poor or misrepresented service. But in the end, Sorensen says, the style of cancellation hurdles created by AOL seems to be unique.

In mid-December, CU launched its new Web site, www.hearusnow.org, to assist people who are frustrated specifically with telecom companies. It’s a grassroots-oriented site developed to inform people about current policies, and why they should pay attention to mergers that will ultimately affect their financial well being. The site has “take action” suggestions that encourage people to write to the Federal Communications Commission. According to Montezemolo, “When a lot of people write and lodge an official complaint, it makes a difference. The more attention consumers can bring to these issues, the greater the chance of change either through legislation or through negative publicity about the company exhibiting bad business practices.”

Although some effort has been made to reign in AOL’s aggressive business practices, they continue. Those most affected by these tactics are customers who don’t have the stamina to withstand the persuasive and abusive practices of the save department, or who don’t think to review their credit-card statements. Others stay connected simply because they don’t have the time to remain on the phone justifying their reasons for canceling. Then there are the elderly, many of whom may be new to the Internet, who remain connected. In Florida, for example, 17 percent—2,900,000—of 17 million residents are age 65 and older. Many are vulnerable to the practiced techniques of the AOL save representatives.

Back in the AOL call-center cubicles, a failed cancellation, or “save,” is celebrated. The customer may hang up the phone angry and frustrated, but the representative can begin packing his bags for the sunny sands of Acapulco. “You’ve got mail” never had quite such a hollow ring.

Attempts to elicit a response from AOL were met with a “No comment” from its Virginia headquarters, and an offer of free membership from the call center.

AOL’s Got Your Info—and So Do the Hackers

While America Online’s cancellation practices have got some members—and soon-to-be ex-members—fuming, many tech-savvy members of the digital generation say that this is the tip of the iceberg when it comes to the questionable practices at AOL. Despite having one of the largest membership tallies of any Internet service provider, AOL is on the bottom of the heap when it comes to protecting those members from the dangers of Internet identity theives.

The frequency with which AOL members’ personal information is stolen, sold or illegally altered in some way has achieved a legendary status among Internet security geeks. According to a February 2003 article in Wired magazine (“Hackers Run Wild and Free on AOL”), gaining access to AOL members’ personal information can be as easy as making a phone call and impersonating a flirty teenage girl or pretending that you’re recovering from jaw surgery.

“I had no info except the screen name, then I called [the AOL support center] and got the first name and last name by saying, ‘Could you repeat what I just said?’” explained a hacker going by the name of hakrobatik.

Of course, hackers haven’t shied away from putting their fingers to keyboards in order to get a look at AOL members’ account information, either. The same Wired article describes a situation that developed earlier in 2003 in which hackers gained access to AOL’s customer database—and the personal information of more than 35 million users—simply by pestering AOL employees via the company’s Instant Messenger service. According to ex-employees and other computer professionals cited in the article, a policy that favors quiet, public-relations-friendly resolution over prosecution has ensured that similar incidents receive little mainstream media attention.

—RICK MARSHALL

Help for Consumers

Attorney General Eliot Spitzer’s office: (800) 771-7755

Consumer Protection Board: (800) 697-1220

AOL cancellation: (888) 265-8008

AOL Headquarters: (703) 265-1000

Consumers Union: www.hearusnow.org

State senators: www.senate.state.ny.us

State assemblymen: ssembly.state.ny.us

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