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Last Updated: Wednesday, 24 August 2005, 18:58 GMT 19:58 UK
AOL pays out after Spitzer probe
AOL headquarters
AOL was accused of ignoring the wishes of customers
The world's largest internet service provider America Online (AOL) has vowed to reform its customer service after agreeing to settle a US lawsuit.

It follows an investigation by New York state attorney general Eliot Spitzer into complaints that AOL ignored people who wanted to cancel the service.

AOL will provide refunds to all the 300 customers who complained and will pay New York State $1.25m (0.69m) costs.

Employees at AOL are rewarded if they can deter customers from cancelling.

For years, AOL has encouraged workers to meet minimum "save" targets to retain customers who want to end their subscriptions.

The Virginia-based company, owned by Time Warner, has agreed to abolish the requirement that its staff achieve a minimum number of "saves" in order to earn a bonus, but stopped short of admitting any wrongdoing.

AOL will provide up to four months of refunds to all New York customers who have claimed their cancellation requests were ignored. It has 1.9 million subscribers in the city.

"This agreement helps ensure that AOL will strive to keep its customers through quality service, not stealth retention programmes," Mr Spitzer said in a statement.

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