AOL takes a U-turn over refunds

America Online (AOL) has staged a dramatic climbdown and will offer refunds to any subscriber who has been unable to access its service since the introduction of an unlimited access payment scheme in December.

Any subscriber who has been met with constant busy signals when trying to log on will be able to request refunds for December and January. Alternatively, they can get credits for one month's free online access.

AOL chief executive Steve Case, who last week said there would be no refunds, issued a statement on Wednesday. He said: 'The events of the past few weeks have visibly reminded us of the responsibilities we have as a service that eight million members rely on each day.'

Refunds will be based on the number of hours subscribers were able to get online. Customers who managed less than two hours during either or both months will get full refunds of $39.90 (#24.18).

Those who clocked up less than eight hours will get 50% refunds, while those who accessed the service for 8 to 15 hours get 25%. Anyone who was online for more than 15 hours is not eligible.

AOL also plans to make it easier for customers to cancel their accounts online and is cancelling advertising designed to attract more subscribers.

Future adverts will carry a disclaimer warning subscribers that they may experience delays in accessing the service.

The climbdown came less than 24 hours before the 30 January deadline imposed by the New York Attorney General's office for AOL to promise refunds to customers.

Additional reporting by VNU Newswire US desk.