Markets Wired

The Federal Trade Commission is seeking public comment on a petition from America Online, Inc. and CompuServe Interactive Services, Inc. to reopen and modify a January 2004 final FTC Order concerning the two companies. Through the Order, AOL and CompuServe, its subsidiary, settled Commission charges that they unfairly continued to bill AOL Internet service subscribers after they had asked to have their subscriptions canceled, and that the firms were late in delivering $400 rebates to consumers who signed up for CompuServe Internet services.

As detailed in the companies’ petition, which can be found on the FTC’s Web site and as a link to this press release at http://www.ftc.gov/opa/2003/09/aol.shtm, AOL and CompuServe now seek to modify the Order to allow the use of a system of third-party verification (TPV) as an alternative to the Confirmation Notice required by the Order to ensure informed consumer consent to continue paid Internet service. The petition states that TPV involves confirming a telephone-based sales transaction through an independent party and recording consumers’ verification. AOL and CompuServe are seeking the modification so they can continue to comply with the Order’s requirement that they obtain the express informed consent of subscribers who initially intend to cancel their Internet service, but who instead agree to continue their paid accounts.

According to the petition, allowing TPV would provide an additional means of instant cancellation for subscribers, since they have the option to decline the service and have the account cancelled without any additional retention efforts. The petition also states that there are no extra costs associated with a TPV cancellation process and that TPV “has been widely recognized as a successful way of obtaining consumer consent for over a decade in telecommunications and other government-regulated areas.”

The Commission is accepting public comments on the petition for 30 days, beginning today and continuing through June 1, 2009. Comments should be sent to: FTC, Office of the Secretary, 600 Pennsylvania Ave., N.W., Washington, DC 20580. (FTC Docket No. C-4105; the staff contact is Connie M. Vecellio, Bureau of Consumer Protection, 202-326-2966; see press release dated September 23, 2003, at http://www.ftc.gov/opa/2003/09/aol.shtm.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

(FYI 22.2009.wpd)