For Your Information: March 24, 1998
The Federal Trade Commission today announced the following action.
Consent agreements given final approval: Following a public comment period, the Commission has made final consent agreements with the following entities. The Commission action makes the consent orders binding on the respondents.
- The Federal Trade Commission has made final consent orders with America Online, Inc. (AOL), Prodigy Services Corporation, and CompuServe, Inc. that will resolve FTC charges that the companies' "free trial" offers resulted in unexpected charges for many consumers. The agency had alleged in its complaints filed in May 1997 that the three Internet service providers had failed to make clear that consumers had an affirmative obligation to cancel before the trial period ended. As a result, consumers who failed to cancel were enrolled automatically as members and began incurring monthly charges, the FTC alleged. The provisions of the consent orders bar the companies from: misrepresenting the terms or conditions of any online service trial offer; representing that an online service is free or otherwise representing that consumers need not pay for the online service, unless they disclose clearly and prominently in their instructional materials any obligation to cancel or take other action to avoid charges, and in all other advertisements include a statement directing consumers to where this disclosure is available. In addition, the settlement with AOL requires the company to disclose the manner in which fees or charges are assessed or calculated and bars misrepresentations about the terms or conditions of any electronic fund transfer from a consumer account. (See news release dated May 1, 1997; Docket No. AOL: C-3787; Prodigy: C-3788; CompuServe: C-3789. The Commission vote to approve the consent orders as final was 4-0, with Commissioner Mary L. Azcuenaga not participating. Staff contact is David Medine, 202-326-3224.)
Copies of the documents referenced above are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
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