Internet service giant America Online is being sued by a group of its subscribers who allege that the company shipped them merchandise they didn't order and then billed them for it.
In a lawsuit filed in federal court in San Francisco last Friday, three Californians who subscribe to AOL charge that the merchandise, which includes a US$10 AOL desk planner, a $74 "bed-in-a-bag" and a $171 digital CD player, was offered to them in pop-up ads when they logged into their AOL Internet accounts. Even though they clicked the No Thanks buttons on their computer screens, the merchandise arrived at their homes later and they received bills for the goods.
The plaintiffs are seeking full refunds for the items, shipping and handling charges, interest and any return shipping charges they may have paid to return the merchandise. They are also asking that they be allowed to keep the items under laws which consider the receipt of unsolicited goods as "gifts."
Barry Himmelstein, an attorney for the plaintiffs, said AOL was notified of the problems with the unordered items but failed to satisfactorily resolve the matters. The alleged incidents have occurred since September.
Though only three people are named as plaintiffs so far, Himmelstein said his law firm "has been contacted by well over 200 people who are reporting the same problem."
The suit, which is seeking class action status, could potentially include thousands of plaintiffs with the same claims, he said. Dulles, Va.-based AOL has about 33 million Internet subscribers. AOL holds credit card or bank account numbers for their subscribers for billing purposes, and it charges merchandise ordered online from its Web site to those accounts.
AOL was negligent because it failed to stop the shipments after "numerous complaints previously received regarding the same problem," according to the 20-page, seven-count lawsuit. The suit, which asks for a jury trial and unspecified damages, also asks that AOL be permanently barred from the alleged practice in the future.
Nicholas Graham, a spokesman for AOL, said the company disputes the claims against it. "We believe these allegations are without merit, and we intend to vigorously contest this lawsuit in court," he said. Graham refused further comment.
Himmelstein said that similar shipments of unordered merchandise continue unabated because AOL hasn't fixed what he alleges is a glitch with the company's software.
"We continue to get a steady stream of people who continue to get unordered merchandise from AOL," Himmelstein said. The company should change its "You've Got Mail" slogan to "You've Got Merchandise," he said.
Neal Goldman, an analyst at the Yankee Group Inc. in Boston, said the case shows both the positives and negatives of digital authentication, where customer billing information is readily available at log-in without having to be manually entered each time. Whether the problem is due to a glitch in AOL's software or to customers hitting a wrong button and ordering merchandise by mistake, the situation shows that having the information so readily available can create unintended problems, he said.
"If I want to make it convenient, I also make it convenient to make mistakes," Goldman said. "The designers of retail sites have to understand some of the potential implications of this."