AOL Will Offer Refunds, Credits in Class Settlement
America Online will settle a class-action lawsuit filed by angry customers who have had trouble connecting to the computer network since a flat-rate pricing plan boosted demand beyond capacity.
The agreement, reached Thursday with plaintiffs in the Schwab versus America Online case, allows AOL members who experienced access problems in February or March to apply for refunds or credits. It expands on a previous settlement with 45 state attorneys general that covered access problems in December and January.
Customers who were online between two and eight hours in either February or March--but not both--can apply for a 50% refund, and customers who used the service between eight and 15 hours may ask for a 25% refund. Those who logged on for more than 15 hours may ask for a one-month credit.
George Vradenburg, chief counsel for the Dulles, Va.-based company, said he expects this settlement to put an end to lawsuits complaining about access problems. Because this settlement is for a class-action lawsuit, it should cover all of the company’s 8 million members and other previously filed access-related lawsuits.
AOL is spending $350 million to increase network capacity 75% by the end of June. Spokeswoman Tricia Primrose said the company has already installed 75,000 additional modems.
Shares in America Online rose 87.5 cents to close at $45.50 on the NYSE.
Requests for refunds and credits can be sent to the law offices of Barnow & Goldberg, 105 W. Madison St., Suite 2200, Chicago, IL 60602. Customers may also submit their requests online (keyword: Member Services) or on the company’s Web site (https://www.aol.com). The company asks that members include their name, address, phone number, master-account screen name and a description of their usage problems.
Separately, the company said Thursday that it could spin off its network service division, called ANS Communications, within a year. That would leave AOL with its online service and a production unit called Greenhouse.
