Court dismisses class action against AOL on behalf of senior citizens

Posted on: January 24th, 2014 by Steve Larson
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FeeUPDATE:  In December 2013, a California federal judge dismissed a proposed class action accusing AOL Inc. of improperly continuing to charge customers for its dial-up Internet service after they had switched to broadband, after AOL disclosed evidence the plaintiff knew about the charges.

Plaintiff Harvey Dunn said in an October complaint that he signed up for AOL more than 10 years ago, and paid for AOL dial-up access to the Internet, as well as for AOL content and email. After AOL changed its policies and stopped charging for its content and email, he said the company failed to properly disclose that fact to its paying customers, all the while billing them using the same terminology as before — which simply said “AOL Service.”

Eventually Dunn switched to a broadband Internet service provider, the complaint said, and did not realize he could cancel his payments to AOL and still receive the content and email for free. But in its motion to dismiss, the company said Dunn knew how to change his account status from fee-based to free and how to adjust his membership level, and referred to two instances in which it claimed he did just that.

“Dunn’s conduct also suggests that he knew that his AOL paid plan provided more services and benefits than just dial-up service. Plaintiff used AOL’s paid services on multiple occasions,” the motion said. “Plaintiff’s conduct further indicates ready familiarity with the distinctions between free and fee-based AOL accounts.”

December 2, 2013:  AOL, Inc. has asked a federal judge to toss a proposed class action accusing the company of improperly continuing to charge customers for its dial-up Internet service after they have switched to broadband, saying the suit was filed in the wrong court.

Plaintiff Harvey Dunn said in an October complaint, filed in California federal court, that he, like millions of other AOL customers, is a senior citizen and not “tech-savvy.” He alleged he signed up for AOL more than 10 years ago, and paid for AOL dial-up access to the Internet, and also for AOL content and email. After AOL changed its policies and stopped charging for its content and email, he said the company failed to properly disclose that fact to its paying customers, all the while billing them using the same terminology as before — which simply said “AOL Service.”

Eventually Dunn switched to a broadband Internet service provider, the complaint said, and did not realize he could cancel his payments to AOL and still receive the content and email for free. But AOL said in a motion to dismiss that Dunn’s terms of service agreement requires all such disputes to be filed in Virginia state or federal court, and as such his suit must be dismissed in California.

“In order to obtain an account from AOL, each member must affirmatively agree to the terms of a written terms of service agreement,” the motion said. “Plaintiff affirmatively and voluntarily agreed to the TOS on two separate occasions.”

AOL went on to argue that even if the California court could hear the case, it would fail anyway, for several reasons, including that the terms of service require notice of billing discrepancies within 90 days after the discrepancy first appears on an account statement, and that Dunn never reported any billing discrepancies to AOL.

The company also said that when Dunn’s attorney contacted it, the attorney did not identify Dunn by name in a notice letter, so AOL was unable to investigate the matter until the plaintiff’s identity was revealed in the complaint.

“After reviewing Dunn’s account, AOL discovered that the central allegation in his suit — that Dunn used Time Warner Broadband in January 2011 but did not cancel his AOL paid service until he learned he could get the same AOL service with a free AOL account in August 2013 — was false,” AOL said in its motion.

The company said Dunn knew how to change his account status from fee-based to free and how to adjust his membership level, and referred to two instances in which it claimed he did just that.