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AOL woes escalate as New York threatens to sue
January 24, 1997
Web posted at: 10:50 p.m. ESTNEW YORK (CNN) -- New York's Attorney General Friday threatened to sue America Online in response to customer complaints of poor service and deceptive business practices.
Dennis Vacco said at a news conference he wants AOL "to stop allegedly deceptive business practices and to win refunds" for customers.
"You don't sell 10,000 tickets to a theater that you have only 3,000 seats for," Attorney General Dennis Vacco said. "Consumers that want refunds should be able to get refunds."
The move was made after representatives from Vacco's office and 19 other state attorneys general voiced their concerns with AOL officials in Chicago. Details from that meeting weren't disclosed.
America Online is the nation's largest Internet provider with eight million customers. Last month AOL unveiled a flat rate plan that offers unlimited online access for $19.95.
Previously, it offered users service for $9.95 for the first five hours of usage and $2.95 for each hour thereafter
Since it switched to unlimited service, the company has been overwhelmed with demand, and many customers have complained of problems connecting to the service.
Interviewed on CNN this morning, America Online Chairman Steve Case said America Online has cut back on marketing and will spend $350 million on new equipment to help handle the additional traffic.
"I'm positive AOL will be able to work out its problem with the state," he said.
Vacco said he will hold off on a lawsuit if the company adequately addresses customer complaints. New York will give AOL five days to respond to its charges in writing, he said.
Jumping to take advantage of the bad publicity, archrival CompuServe is planning to air a commercial during Sunday's Super Bowl that contains a thinly veiled stab at AOL's usage problems -- 15 seconds of a blank screen accompanied by a busy signal.
Other online services offer unlimited access plans, including the Microsoft Network, but Vacco said the bulk of about 100 complaints sent to his office in recent weeks concerned AOL.
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