America Online and its CompuServe subsidiary were hit by a complaint from Ohio's attorney general, claiming that they charged customers for internet access services without their permission.
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The complaint, filed by Ohio State attorney general Jim Petro, claimed that the service providers failed to honour cancellation requests from users who were on free subscription trials. Once the free trials were over, AOL charged consumers' credit cards and bank accounts without permission, the complaint alleged.
The complaint charges the service providers of violating the Consumer Sales Practices Act and asks for a $25,000 (£14,665) penalty for each violation.
Consumers should be able to cancel an agreement with a business within contractual terms, knowing the business will honour the cancellation, Petro said.
AOL said in a statement that it strongly disagreed with the complaint.
"Our terms of service - something every member agrees to when they sign up for the service - clearly spells out how members are billed and how they can cancel at any time to avoid further charges," the statement said.
The complaint comes amid other legal woes for AOL, which is being investigated by both the US Department of Justice and US Securities and Exchange Commission (SEC) for questions relating to its accounting practices.
Furthermore, the SEC is looking into how AOL accounted for its subscriber numbers, alleging that it may have used a bulk subscriber program to fatten its user rolls.
In a statement, Petro said that his office has received more than 250 complaints about the companies over the past two years. He is also accusing AOL and CompuServe of not clearly displaying the cancellation process on the free trial subscription.
Scarlett Pruitt writes for IDG News Service