01/19/98 FIFTY HOURS FREE! SORT OF

FIFTY HOURS FREE! SORT OF

AMERICA ONLINE IS IN A NEW fracas with state attorneys general, this time over allegedly deceptive sales practices. At issue is its latest promotion, promising 50 free hours. The AGs say AOL's pitch is misleading since it doesn't make clear you have to use the 50 hours within one month of signing up. After that, you lose it. Plus, they say, accepting free time means you unwittingly signed up for AOL at $19.95 monthly.
A committee of prosecutors from 47 states, led by Deborah Hagan of the Illinois Attorney General's Office, has been meeting with AOL reps in Chicago on the issue. A settlement could affect many of the 2 million who first subscribed in 1997.
AOL says its sales material is clear and contends that it always refunds fees if customers complain. Should the negotiations not work out, the AGs say they will sue. AOL lawyer George Vradenburg III calls such threats a bargaining stance and says talks are progressing.
AOL's two previous run-ins with state AGs resulted in $24 million in refunds. The most recent stemmed from busy signals subscribers got because AOL couldn't handle fresh business brought on by flat rates.
EDITED BY LARRY LIGHT & ROBERT McNATT
Roy Furchgott