Anti-AOL

Today Joe Manna responded to a comment of mine that I left on his blog a few weeks ago about a lawsuit AOL settled over advertisements in the footers of AOL email (some topics are much too "Yawn, whatever" for me to cover, sorry).

In case you missed it, last month AOL was court-ordered to pay damages to people who could not disable advertisements on their outbound email. The advertisements encouraged people to sign up for AOL. The court ordered AOL to pay damages in the form of a "small donation" to "charity".

I hinted to Joe that both the lawsuit and settlement was ridiculous. How about a more serious issue that AOL should be sued for (again): all the customers who are routinely overcharged each month, and who get lied to by call reps who say their accounts are canceled, when in fact they are not? Where is the money for them?

Joe's response almost exactly mirrors the answer I received on Alley Insider when I was sparring with anonymous AOLers over the same issue a month ago. Except Joe's comment and mine somehow got lost in the Disqus system that Joe adapted for his blog, making them impossible to read and/or reply to, so I'll reply the old-fashioned way: on my blog.

Joe Manna wrote:

The best part of it [is], the donation to charity is a great way to reduce their [AOL's] tax footprint and they can deduct all of it, even if court-ordered.

Well, go AOL! Reduce that tax footprint, Tim.

Joe continued:

With regard to people being charged $20 [by AOL] month after month for over a year is an issue I have. Not with the company but the people being charged. I'm not trying to defend 'the man', but there's a certain amount of personal responsibility people have in monitoring their finances ensuring they are billed correctly by their creditors.

Oh, really?

How could she [unidentified subject] not know after at least a couple months something's wrong?

I'm unsure which "she" he was referring to since our comments are lost in Discus space, but either way, I don't disagree with Joe. You have a responsibility as a consumer to check your bills each month for overcharges and accounts that haven't been canceled. No argument there.

But...

Sometimes shit happens. Perhaps you get hospitalized the day after you cancel AOL only to learn six months later, after you finally get out of the hospital, that AOL is still billing you for that account.

Or perhaps you're one of those meek, trusting souls who simply "believe" AOL will cancel your account in a timely manner, so you don't check your credit or debit card statement the following month, or the month after, or the month after that, to make sure the account is in fact, canceled.

While I'm not defending anyone who trusts a huge monolithic company to make the right financial decisions for them, I'd like to point out that that is a different situation than one in which someone simply doesn't check their credit card statements at all, for whatever reason.

I'd also like to point out that a customer noticing they've been robbed is not essential to successfully robbing that customer.

AOL: A classic pickpocket.

If you get your pocket picked but you don't notice your wallet's missing for two months, that may make you incredibly forgetful, but it doesn't take away the fact that there was a robber (the person who picked your pocket) and a victim (you).

If you went two months without noticing your missing wallet, does that mean you shouldn't file a police report now since, after all, you were too forgetful to file one sooner - does that two-month forgetful lapse somehow mean that getting your pocket picked was your own fault?

With all due respect: That argument isn't even logical.

Saying that a time lapse in checking one's credit or debit card statement for charges that shouldn't come through from AOL makes the consumer responsible for any such charges incurred is the biggest bunch of psychological trash since Google announced their motto was "Don't be evil", yet it is perpetuated throughout the ranks of the few lost souls still working at AOL.

It is at best a specious arguement, and at worst lowly mind games played by AOL to cover their financial ass after picking people's pockets to ensure they can continue properly padding their shrinking bottom line.

To bolster his argument, Joe continues:

That said, the credit policies at AOL only afford three months cash credit back to people which is disappointing for people have held service for a year. There's an amount of personal responsibility that we all have in holding companies accountable. Not a year later unless circumstances like death or whatnot took place.

Sorry, but even if "death or whatnot took place", the dead infamously can't cancel AOL, either (the tape is from ImpiousDigest.com, which backlinked to this blog after I mentioned it was hard to find cancel pages on AOL).

As to Joe's claim that you can only get a three month refund from AOL no matter how many months or years you were overcharged, check out this completely undead customer who went three years without checking for charges from AOL for an account he canceled three years ago.

Despite the lengthy (in fact, ridiculous) time lapse, he got his money back from AOL, and if you're being overcharged by AOL, even if you haven't checked your credit and debit statements as religiously as you should have, the answer is, No matter what, yes, you can - and should - get your money back from AOL, too.

That's right, hackers, this is a no-strings-attached free gift from AOL to you, their nifty hackers - hack into as many free AOL accounts as you want and some of them will be yours to keep, free-of-charge, FOREVER. This is a once-in-a-lifetime opportunity - get'm NOW before other hackers lift all the free AOL accounts for you!

The only catch? Once AOL learns a free AOL account is compromised, it will be "blocked" for about the same length of time: forever. I imagine AOL might delete it.

But hackers: Don't let AOL's silly account deletion stop you!

Even if you must stop using a hacked AOL account after a while, just think - the original account owner can never have it back, either. As in NEVER!

Not even if it was a paid account from, say, 1991, with tons of personal information and thousands of emails that got converted into a supposedly more headache-free free AOL account.

Not even if the owner of the hacked account gives every proof of payment and identity possible to AOL. You can't lose!

To ensure my accuracy, here's Randolph:

How to Make Hacked Free AOL Accounts Your Own

OK. So a month ago (around July 20-30) I was signed offline on my AOL account on AIM. I couldn't get back on. Tryed to reset my password and its telling me all my security answers and information is invalid. I phone AOL's Customer Service line. They transfer me to AOL's Fraud Department. I tell them the story, they "block" the account from anyone accessing it. They asked me to send in 2 forms of documentation stating I am the original owner of the account. A drivers license and a bank statement showing when I was last billed for AOL, on it.

Now. Keep in mind. This is a Free AOL account. It was converted into a Free AOL from a Paying AOL in 2006-2007 when the Free AOL Program launched.

So we phone (also went to) the bank and ask them to look up the account that's tied to the AOL account. It's a checkings account that has been closed for several years now. They want to charge us $6 per page to go back in time because a agency has to go through the account or something like that. So $20 total, they get the statement in a matter of 1-2 weeks and ask us to come pick it up at our local bank (branch). We go to Staples, made a copy of the drivers license and a copy of the bank statement, faxed it in.

Next day. We call up AOL's Fraud Department and speak to a Customer Representative who can barely speak any English what so ever. Make a long story short: they are telling us they need the Debit card, that was attached to the checkings accounts, number [so now we need to] fax in a document written by the bank, signed by the bank, with the debit card scanned or typed out on the paper. This was when I knew AOL really has lost it.

We aren't able to obtain that AT ALL. The card was shredded YEARS ago and when we went to the bank, they all looked at us funny and even the customers on line behind us said "no that can't be possible".....like we were crazy! The bank even said the 2 forms of ID we previously sent should be ENOUGH. MORE THEN ENOUGH.

Fast forward to today actually just now: I call AOL's Fraud Department. I get an American Customer Representative. She tells me straight up answers.

---

Quote - AOL Fraud Telephone Conversation

Me: What am I suppose to do if I can't get that debit cards information?
Her: I don't know what to tell you. It's a standard procedure to protect the owner of this account. (me obviously)

Me: So let me ask you this. If someone makes a Free AOL account at http://aol.com, how do they get their account back if its compromised?
Her: They can't, they have to sign up for a new one.

---

My jaw dropped. I couldn't believe what I just heard. That's when I just said OK and hung up.

I am BEYOND disgusted with AOL.

I filed a Internet Crime Complaint @ ic3.gov in an attempt hoping to get somewhere.

Please post any ideas/suggestions/comments relating to this. Thank you for reading.

Thanks to Craigs List (my reader's handle, not the website) Randolph (see comment below) for the heads-up.

I have a tutorial to write and an older post to rework and republish this week, and I'd like to do a rip, I mean, a review of myAOL and Mgnet, but I'll touch quickly on what's going on this week with AOL...wow, not much isn't.

First off, if you haven't heard about AOL's class-action settlement with 47 states by now (or 48, if you count the one state that didn't participate but is covered, and if you conveniently forget the District of Columbia altogether, which is also covered) you probably don't have a pulse.

I found an excellent article in the Contra-Costa Times that might sum up what everyone's thinking: it's not the first time 47 states have gone after AOL for misleading, deceptive, and difficult cancellation practices, and it might not be the last.

$3 million to cover court costs for the states is a slap on the hand for a company that settled with 47 states for the same reason in 1998 and has settled at least five similar lawsuits brought by various states since then.

No one thinks this settlement will cure what ails AOL...namely, greed. It's a shame we can't look forward to a better day for the company formerly known as America Online, the company most famous for actually putting most of America online, but greed warps whatever it touches.

Secondly, while a recent post of mine might have made me seem psychic about AOL's future, (thank you for thinking so), it doesn't take a psychic to realize AOL is in trouble, with a subscriber pool that's plunged from 22 million to 12 million in the last two years, online metrics that prove while people spend more time on AOL than on any other site, most of them are only picking up email and chatting on AIM, and securities fraud charges AOL cannot escape seven years after being exposed for them by the Washington Post.

A few days after posting the latest about AOL's fraud, no less than Pali Research analyst Richard Greenfield weighed in on the state of AOL, as told by Forbes. He upgraded Time Warner stock from Neutral to Buy, not because he thinks AOL might improve, but because he thinks it will be sold within the next year.

An excellent flow-chart at News Visual reignited talk that AOL will be sold to Yahoo. Parsons and Terry Semel were talking together at the recent Allen & Company media conference: Terry Semel was once Chairman and Co-Chief Executive Officer of Time Warner, so maybe it wasn't just a patio chair Parsons was looking to sell, after all.

As I wrote in Does AOL print it's own money?, AOL has spent years paying for dozens of fraudulent escapades involving falsified advertising revenue and non-existent deals dreamed up between them and dozens of smaller Internet companies during their heyday and sequential dot-bust.

While a running tally I've kept on fraud settlements has them paying over $3,995,000,000 to date, you can now tack on an additional $2.8 billion they must cough up to cover themselves and avoid going to trial. As I pointed out in my other post, AOL depleted the "reserve" account that pays these settlements back in March, when they ran into the red in order to cover a $144 million settlement reached with The Ohio Bureau of Workers Compensation and five of their state pension funds:

Let's go over this again. How much is left in their reserve? That's right, folks: nothing. How will they pay for up to $2.3 billion in future settlements with no reserve left at all?

While my estimate was very good (I mused that AOL would pay out another $2.3-$3 billion to continue settling suits this year) AOL still refuses to explain how they will pay for these settlements. They must be hitting up Time Warner for loans, since the depleted reserve hasn't been renewed since March, when they promptly emptied it again. My bet is Time Warner demands separation from AOL by the end of the year, when it will be sold off as an independent property (hopefully to the lowest bidder, someone who turns it back into what it should be...a domain name, nothing more).

In news that's just the old being made new again, AOL settled complaints with 48 states yesterday, according to Reuters.

"The resolution announced Wednesday was driven by a deluge of complaints from AOL customers who said they tried to close their accounts, only to be thwarted in their attempts or discover they were still being billed for services that they thought had been canceled.

The outcry triggered a multistate investigation that would have culminated in a lawsuit if AOL hadn't agreed to ante up and change its ways, said David Tiede, a deputy attorney general in California.

California was among the states that played a leading role in the settlement. New York and Florida were the only states that didn't participate in the inquiry."

Terms of the settlement require AOL to pay $3 million dollars, with each state getting a small chunk of that sum (somewhere in the $20,000-$40,0000 range). This sum typically covers costs incurred for each state to have their Attorney General bring charges against AOL, and to pay court and paperwork fees.

AOL is now completely prohibited from paying commission to call reps (known as Retention Specialists within in the company). The terms of their settlement with New York, made in 2005, prohibited them from allowing call reps to receive commissions per "save"; today's agreement requires call reps to receive no commissions at all. While I know most AOL call reps will quit their jobs after this announcement, it's still great news for any lucky AOL members who can still find someone answering the phones.

Have you had a hard time canceling AOL? Please, let me know.

---

If you want to cancel AOL, again, new rules should work in your favor:

• AOL is finally prohibited from paying commission to call reps, so it should be easier now to cancel your account, since there's no financial incentive to "save" you.
• AOL must issue refunds to anyone who can prove they were charged monthly fees after  trying to cancel.
• As I've hinted recently, there is an online cancellation form for members who want to cancel their accounts, but up until today I couldn't find it. The only problem is, you don't know if your account is canceled until you get a Cancellation Confirmation letter perhaps weeks later, or you see AOL is no longer dunning your credit or debit card each month.

This is cancel.aol.com, where you can find the online form to cancel. You must be signed into your AOL account with your screen name and password to see this page. For instructions on how to cancel AOL online, click here. See my How-To section for every way under the sun to get AOL out of your life.

03-04-2007: Updated and recalculated after AOL's latest settlement. Updated again 03-11-2007, 4-02-2007 and 5-10-2007.

AOL is painting their bad news in a positive light. Now they claim a recent stack of accounting fraud lawsuits against them are going to be paid for with a special fund that they set up years ago with $20 million, that they added another $600 million to in Dec. 2006. They're wrong. They're not even close to telling the truth.

These lawsuits began over one issue: AOL inflating ad revenue through scurrilous deals with other companies using round-trip accounting and other methods, which became one huge scandal in 2001 after key players in the scam cashed out with a combined $1 billion (though the creative accounting and deal-making really began way back in 1994 -- that's not a typo; it began back in 1994, maybe earlier).

I've recounted the stories behind and the recent acquittals of some major players, but I've never written about the huge amounts of money that were vacuumed out of AOL over the years thanks to the conniving thieves who orchestrated these deals.

Plenty of outstanding lawsuits remain, and the price to settle them hovers around $3 billion. AOL had only $215 million in reserve before they paid $665 million this month to settle more lawsuits arising from the scandal, so they have some explaining to do. While TW has enough money (and if all else fails, enough paper) to cover a worst-case scenario, they seem to be telling their favorite fairy tale again, the one that always begins with the line, "The truth is better than what you're hearing, people, we promise!"

No, it's not.

Do the Math

Settled Accounting Fraud Lawsuits Against AOL

• 1999: $25 million for their first settlement for securities fraud including $18 million for settlement of Orman v. America Online, Inc.
• 2004: $210 million to settle with the Justice Dept. for fraud charges
• 2004: $2.6 billion (final figure) to settle shareholder suits for fraud
• 2005: $300 million to settle over fraudulent deals with Bertelsmann AG
• 2007: $50 million to settle Alaska's fraud suit
• 2007: $105 million to settle Calstrs' fraud suit
• 2007: $405 million to settle more fraud claims
• 2007: $260 million to settle the University of California's fraud suit

Cost to settle accounting lawsuits to date: $3,995,000,000

More Settled Lawsuits Against AOL

(With known dollar amounts -- many more were settled for undisclosed amounts, so I've omitted them.)

• 1998: $34 million to settle state's class-actions for overbilling and anti-cancellation policies
• 2002: $15 million to settle claims against their 5.0 software
• 1998-2007: $28 million to pay off various states for over-billing and anti-cancellation policies

Cost to settle other lawsuits to date: $72,000,000

Cost of all settled lawsuits to date: $4,027,000,000

They've spent $4 billion over the years that was never in reserve to cover those settlements. Where did the money not held in reserve come from?

Ongoing Accounting Fraud Lawsuits Against AOL

• 2006: Minnesota's "opt-out" lawsuit for up to $1.6 billion

More Ongoing Lawsuits Against AOL

• 2006: For releasing member's search records online, with an estimated worth of over $686 million

Let's go over this again. How much is left in their reserve? That's right, folks: nothing. They had to find $45 million that wasn't in reserve just to pay for the last settlement a few days ago. How will they pay for up to $2.3 billion in future settlements with no reserve at all?

Is it just me, or does a close look at the figures prove AOL is trying to diminish the severity of their losses while never explaining to the public how they cover them in the first place?

Update 03-11-2007: Without explaining the irreconcilable figures above, AOL's gone ahead and created another reserve to handle remaining lawsuits for their fraudulent activities. The only problem is, the amount in the new reserve is already spent -- $144 million -- exactly what they must now pay to the state of Ohio for a settlement reached last week with The Ohio Bureau of Workers Compensation and five of their state pension funds. Like everyone else who's sued them, they lost out when AOL's stock price plunged from $85 to $10 a share shortly after the ruinous AOL-Time Warner merger. Ohio lost $400 million, to be exact, so throwing them $144 million is purely symbolic, given their losses.

That leaves $45 million unaccounted for that they spent last week to cover a larger-than-expected settlement with the University of California and the unsettled lawsuits mentioned above. It should be fun to see just how far they'll dip into TW's profits to cover future settlements, how secretive they'll be about where the money comes from, and how it affects their bottom line.

Edited 05-15-2007.

It's a slow news day so I'll catch up on the dot-com bust as it relates to AOL. Their double-dealing and questionable activities near the end of the first dot-com bubble (we're in the second one right now, hence Bubble 2.0) have taken four years to work through court. In fact, the show's not over yet, but I'm sure the final acts will turn out no more exciting than parts One and Two did.

While at least three AOL executives could've used some jail time to straighten out their moral compasses (the settlement document shows these crooks came as close as possible to admitting their misdeeds without saying "I'm guilty") they walked out of court free men with tears in their eyes and no doubt thanking God for good lawyers.

Such is the way in a world where money, power, and good legal representation gets you further than values, ethics, and good judgment ever will; the latter, last I heard, merely gets you laughed out of Silicon Valley. Welcome to the dot-com cesspool; the star of our show today is AOL.

The litigation still underway dates back to AOL's financial misdeeds starting in 2000, performed to buck a massive industry-wide downturn in advertising revenue, and propelled by a meeting at AOL's headquarters where it was announced they faced losing more than $140 million in ad revenue the following year.

The Washington Post did an exhaustive investigation in 2002 into the true nature of AOL's deals by perusing SEC and other public filings to unravel a kitchen sink of complex schemes that turned what would have been a significant ad revenue downturn into a series of stunning gains.

These well-thought-out shell games made them a Wall Street darling and made the AOL-Time Warner merger (in which AOL bought TW, not the other way around) look like the deal of the century. AOL, using inflated ad revenue figures, made news for being the only major dot-com to beat bleak revenue expectations of the era. The deals they pulled off were complex and sinister. (Quotes that follow are taken from the Washington Post.)

AOL converted legal disputes into ad deals. It negotiated a shift in revenue from one division to another, bolstering its online business. It sold ads on behalf of online auction giant eBay Inc., booking the sale of eBay's ads as AOL's own revenue. AOL bartered ads for computer equipment in a deal with Sun Microsystems Inc. AOL counted stock rights as ad and commerce revenue in a deal with a Las Vegas firm called PurchasePro.com Inc.

AOL also found ways to turn the dot-com collapse to its advantage, renegotiating long-term ad contracts it risked losing into short-term gains that boosted its quarterly revenue....

The company said the total revenue represented by all the deals reviewed by The Post was "truly microscopic" -- less than 2 percent of AOL's overall revenue, including subscriber fees -- and therefore immaterial to the company's business.

If the amounts in question were "truly microscopic" and "immaterial," why go through all the (il)legal maneuvers? Why take the time and the trouble to pull those deals off? Clearly they were worried about showing up as less than capable of surviving the dot-com collapse.

Collectively, the deals helped AOL beat Wall Street analysts' expectations for earnings per share -- a crucial profit yardstick for investors -- by a penny per share in two quarters in 2000. At the time, investors punished companies whose earnings were off by even a cent. For example, when AOL announced its earnings that October, Apple Computer Inc. announced it missed Wall Street's reduced projections by one cent, sending its shares down 6 percent the next day.

I remember when a penny a share made a huge difference and holding my breath in anticipation of earnings reports from companies I supported, and what it felt like when a company I believed in missed by that one crucial penny. It was an absurd way to gauge a company's success, but also the de facto performance benchmark, so AOL made sure they could win in that climate by hook or crook.

It was their now-defunct Business Division that did the wheeling and dealing at AOL, especially for ad deals. AOL didn't get into selling ads last summer when they officially changed their subscriber-based model to a more ad-driven one; that's been going on since 1996, and they've only been trying to strengthen their grip on ad-based revenue since then. Dot-com stocks were falling in 2000 and AOL was coming under fire for buying Time Warner, but with inflated ad revenue figures, that didn't matter:

Several analysts at the time took AOL's reports of a big jump in ad and commerce revenue in the Sept. 30 quarter as a sign of the company's strength in the face of a slowing ad market, and they encouraged investors to buy AOL shares as the merger neared.

In a research note a day after AOL's Oct. 18 conference call, analyst Youssef H. Squali, then of ING Barings LLC, reiterated his "strong buy" rating on AOL's stock. "Solid advertising revenues attest to AOL's hybrid subscription/advertising model, which so far has provided the company with more protection from the dot-com meltdown than other large new media companies," he wrote...

What the analysts failed to note -- or didn't know -- was that many dot-coms no longer had the cash to pay for all the ads they had agreed to buy in their premium-priced long-term contracts with AOL.

An internal AOL memo the WP said described "shaky deals" that could lose AOL $23.2 million in revenue by Sept. 30, 2000 was just the tip of the iceberg:

...other internal company documents obtained by The Post said that AOL was "at risk" to lose more than $108 million in ad revenue in fiscal 2001, from July 2000 to June 2001, with most of that jeopardized revenue coming from dot-coms.

Would AOL make those deals and vulnerabilities public? Not willingly. It took the Washington Post to do that but still AOL denied anything was wrong, using their crooked accounting firm, Ernst & Young, to back their claim that the companies involved would survive the dot-com bust and pay them as needed, and even claimed the overall amounts in question were "too small" to affect their bottom line.

AOL could've chosen to take some of their deadbeat business partners to court, but they didn't because it would risk their carefully cultivated "financial warrior" image. Over a possible image problem they chose to hide the truth from everyone until they no longer could.

The Washington Post detailed just a smattering of the deals AOL made during that time; the actual list is much longer. The PurchasePro fiasco, for instance, is still in litigation today. According to a 2003 article from C|Net:

...[senior VP] Anderson and an employee at the media company [AOL] engaged in a complex shell game that was hidden from auditors and investors. PurchasePro offered the media company employee $30 million in warrants, which the employee exchanged for future guarantees of revenue for PurchasePro, the Justice Department said. These guarantees were achieved when the media company employee entered into side deals with suppliers and partners that then bought PurchasePro software licenses, the department said.

While PurchasePro Inc. chief executive Charles E. Johnson Jr. got off on an unknown technicality (a mistrial was declared for him last November) thanks to the PurchasePro/AOL scheme:

...Jeffrey R. Anderson, PurchasePro's former senior vice president of sales and strategic development, pleaded guilty to charges of inflating the company's revenue during the fourth quarter of 2000 and the first quarter of 2001. Scott H. Miller, the former controller, entered a guilty plea for obstructing a federal criminal investigation...Anderson faces up to five years in prison and a fine of up to $250,000. Miller faces a maximum of 20 years in prison and a $250,000 fine.

That brings us to this week's news, which might be shocking to the general public but is standard fare for anyone in the know. In the case of any big class action against a well-known and deep-pocketed company with fancy legal representation, it's better to opt out and start another lawsuit than to take what you'll get otherwise. As FuckedGoogle has pointed out, class-actions are rife with fraudulent players, including the lawyers who start them, and the defense lawyers (Stephen Moulouf, anyone?) who try to manipulate the outcome. The amount of people covered is so vast that dilution of payment is almost inevitable once the case is settled rather than brought to trial, and these companies would rather pay out big bucks to shut everyone up than admit wrongdoing.

Calstrs, the California teachers' union, is one such entity that chose to pursue a separate class action against AOL for dot-com bust scams that resulted in them inflating their stock price in 2000 and 2001, before their merger with Time Warner. Starting a separate lawsuit was the smartest move they could make; they collected a $105 million judgment against TW. According to an article on cpf.com:

Had Calstrs joined about 600,000 other participants in the class action against Time Warner, it would have received a far lower award...Steve Williams of Cotchett, Pitre & McCarthy, the pension fund's outside counsel in the litigation, estimated that Calstrs would have received $15.5 million to $16 million if it had not opted out.

I haven't been pounding out updates lately but I'm too busy to write (and too tired when I'm not too busy) so I probably won't match the pace of what I kicked out during January again. For a while I thought I'd turn the site into an updated news-blog but there isn't enough going on to make it worthwhile. In fact some of the latest news just bores me to death and I can't write when I'm bored.

Take the TradeDoubler deal. It's AOL purchasing ad.com all over again, only the European version of it...who cares? The only real news here is AOL stole so much money from canceling subscribers over the years that they can't figure out how to spend all of it so they blew it on a huge Christmas party, a stupid-looking sculpture, technology for the Haier Hard Drive, and $900 million for TradeDoubler, a Bubble 2.0 deal that might or might not close by February 28th because some shareholders think TD's worth more than that. Watch me cry great big crocodile tears when AOL loses out on it. Not. BTW, the Anti-AOL Network covered the story if you really want it. I couldn't really muster up enough energy about TradeDoubler to give a damn.

In other news, the accounting fraud trial went into a second day of jury deliberations last Friday, but there's nothing on the wires about it now and it's a toss-up whether or not anyone's found guilty. I say they walk because no AOL exec has ever been put away for financial misdeeds (but at least a few of them should be, IMO). It'd be nice to see it end in an Enron sort of way, complete with Randy Falco having a heart attack over the whole thing, but I'm not holding my breath.

In the meantime I have projects going on to get back to my site's roots: consumer advocacy. No one seems to know why I have this site (except Jason Calacanis, who really gets it) so let me explain. I started writing about AOL to fulfill a promise I made to a call center supervisor 13 months ago and I don't intend to stop. I was infuriated at what I had to go through to cancel AOL, shocked at how hard it is to uninstall and outraged at their dishonest call center tactics, but I kept writing after I was tempted to delete the whole thing last January (just one month into it!) after it hit me I could explain to others why AOL is hard on your wallet, your computer, and inadequate for surfing the Web. Once that idea hit me it snowballed. I learned the hottest searches for AOL focus on how to cancel it, how to uninstall it, and how to file a complaint against AOL for over-billing, information that in all cases they keep very rare.

Update: The AOL/Purchase Pro trial ended in acquittals shortly after I wrote this article. According to an article I just read in the Washington Times, "All three defendants wept with relief." I'd cry too if I got to walk away from federal prison time for what they were accused of, plus now they get to see their charges expunged like the fraud never happened. I hate to sound bitter, (edit...no I don't) but what a crock of shit.

Tom Spring of PC World did a year-end roundup of the hardest online services to cancel. Which company do you think took money from him after he canceled all three of his accounts before the trials were over, then denied culpability based on "service reps errors"?

Hand it to AOL for pure shamelessness. Not even four huge, headline-making lawsuits (they settled with New York in 2005 for $1.25 million, with Ohio in 2004 for $25 million, with Illinois in January 2006 for $25 million, and with Florida in December 2006 for $1.5 million) can stop them from snatching hard-earned money right out of your hand.

AOL makes you give them your credit card number when you sign up for their service so they can bill you for it at least one month in advance. In order to get a refund, you have to ASK FOR ONE when you cancel.

Do they disclose in their contract that you have to ask them for a refund? No. It's not mentioned in the contract. As I've mentioned before, I come from a family of lawyers, and this is one case I'd love to hang them for in any courtroom, anywhere, anytime. How can they get away with this -- and why does anyone let them?

Tom Spring signed up for three trials (one in Massachusetts, one in New York, and one in Colorado) and was surprised by the results when he called AOL to cancel each one of them:

"...even though I canceled my 90-day trial after only 16 days, I was hit with a charge of $25.90, the monthly AOL fee, on my credit card. In both of those [other] cases, my credit card was [also] charged the monthly fee.
Later, when I called back and questioned why I had been billed, another representative told me that I had to ask for a refund, or else I wouldn't receive one--odd, given that the first rep had said that I wouldn't be billed.

Just to clarify, it says nowhere in the contract that you have to ask for a refund when you call to cancel, only that you'll get a refund if you cancel before the 90 day trial period ends.

If Tom Spring, an intelligent man who writes for PC World, a magazine on the cutting edge of tech, was ripped off by AOL, anyone is vulnerable to their thievery. It's not that AOL's subscribers are stupid or easily tricked. AOL is fooling everyone with a contract that makes it sound like you AUTOMATICALLY get your money back if you cancel before the trial period ends.

How are members supposed to know they have to ask AOL for a refund? How can members who cancel by mail, fax, or online get their money back? This is the most grossly deceptive and unfair situation I've ever seen them tangled up in, so if anyone wants to start a new lawsuit against them for this fraudulent practice, I'll be right there with them. I'll sign up for a paid version of AOL in a heartbeat and play dumb when I cancel just to see if they'll pull this crap on me, too.

Kent D. Wakeford, former executive affairs director of AOL's now-defunct NY business unit. It's a real award (as far as he was concerned) and was bestowed upon him by his former boss, David Colburn. In Colburn's speech about it, he called Kent's deal-making with PurchasePro, their former business partner:

...""science fiction," according to "Stealing Time," a book by Washington Post reporter Alec Klein on the company's accounting practices. Colburn has said he did not recall using that term. Colleagues laughed as Wakeford accepted the award, thanking AOL for its help, Klein wrote."

Now let me explain the rest, in case you missed AOL's biggest gravy train of the decade and one of the most talked-about accounting fraud scandals of all time. Here's how this very profitable and face-saving racket worked, according to the Boston Globe:

[US Attorney Paul] McNulty said the indictment [against AOL] "lays out a story of deception and fraud" that included secret contracts, forged contracts, and "revenue swaps," in which companies would agree to buy software from PurchasePro only if PurchasePro agreed to buy goods and services from those companies.

The deals allowed PurchasePro to post illusory revenue figures and meet Wall Street projections.

It shows a story of trying to create an appearance of success in business when it just wasn't there," McNulty said.

AOL, a unit of Time Warner Inc., benefited from the deals because it received options to buy PurchasePro stock and therefore had an incentive to support the masquerade that PurchasePro was a healthy company, McNulty said.

The business unit behind this lucrative mess was once run by Wakeford, the only employee of AOL charged with conspiracy now besides John P. Tuli, former vice president of AOL's NetBusiness unit in Dulles, Virginia. Six AOL executives were charged with the crime on January 11, 2006, but charges have since been dropped against the other four.

Not only that, the defense is pursuing dismissal (and the latest buzz says the judge will grant it) so it might be time for AOL to hand out yet another "science fiction" award. I'd like to see one in memory of Jon Miller, for the "science fiction" that AOL is making significant ad revenue gains in any unit besides lucrative-of-late advertising.com. Anyone with me on that?

While AOL's execs may start pouring champagne on each other once they get away with this, PurchasePro's defense team will be trying to sharpen their strategy, because their clients, oddly enough, are in a world of trouble for the same financial crimes AOL committed right alongside them. (AOL can thank their lucky stars for snafus like the statute of limitations, which conveniently ran out in their case.) According to this Washington Post article:

Charles E. Johnson Jr., the founder of PurchasePro, is on trial on federal charges that he lied to auditors and shareholders about his company's financial health. A half-dozen former PurchasePro employees have already pleaded guilty and could testify against Johnson and a former subordinate, Christopher J. Benyo, in the case.

Meanwhile, earlier this month, Stuart H. Wolff, the former chief executive of Homestore.com, an online real estate venture based in California, was sentenced to 15 years in prison after a jury convicted him of conspiracy, insider trading, filing false reports and lying to auditors in connection with revenue-swapping deals with AOL.

AOL could use at least one honest person, like the former general counsel of PurchasePro, who was also indicted on charges of conspiracy in the scandal but later acquitted. His name is Scott Weigand and he wrote for law.com:

I consider myself a whistle-blower. In May 2001, because of concerns I had about the activity of certain members of the company's senior management team, I pushed for the creation of a special committee of PurchasePro's board. I wanted the committee to investigate the circumstances leading up to the company's 2001 first-quarter earnings call. As a result of the special committee's investigation, the CEO and two other executives were fired. The company delayed filing its Form 10-Q with the SEC, ultimately reducing its stated revenue for the period by about 40 percent from what it previously announced.

I felt vindicated when the judge who acquitted me said that I "did a very good job of handling an extraordinarily difficult situation."