America Online admitted last week that its $350 million (#230 million) system overhaul hasn't worked.
The company, which has been dogged by legal case after legal case, said it will offer refunds to customers who had trouble logging on during February and March.
AOL agreed to refund up to $10 to customers who had trouble dialling in during that period. The company has already agreed to pay customers up to $40 each for access troubles in December and January. George Vradenburg, AOL's chief counsel, said: "It is an excellent settlement. It brings substantial value to the consumers."
But as the company poured out more refunds, the New York state attorney general's office began investigating complaints about a toll-free number AOL has advertised which can surcharge customers up to $6 an hour. The bills show up on credit cards rather than phone bills, making the situation "extremely confusing", said a spokesman from the state attorney's office.
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