Internet Service Provider Will Give Refunds,
Change Practices, and Pay Iowa $50,000

"IDT ran prominent newspaper advertisements we alleged were misleading," Miller said. He said the ads represented that IDT would provide "total Internet access" for $15 per month, when in fact the company charged $29 per month for accounts with full graphic capability of the type pictured in IDT ads. The cheaper rate was for text-only service.

Miller said the Consumer Protection Division of his office investigated the matter in cooperation with several other states, after the Division spotted the ads in Iowa. IDT reached a formal agreement providing for $50,000 payments to each of five states -- Iowa, New York, New Jersey, Tennessee, and Texas. (Michigan, which joined the action after the other states, also is party to the agreement but not the payment.)

The agreement also provides for refunds to certain IDT members who encountered unexpected long distance charges in accessing the service or incurred long distance charges for telephone calls to IDT's technical support, customer service, or billing departments. Miller said IDT ads stated that calls to the service would be "always a local call" or "almost always a local call" when in fact many customers were given dial-up numbers which could only be reached by a toll call. Ads promised free customer service, but Iowans' service and billing calls were toll calls to New Jersey.

The agreement prohibits IDT from running ads that misrepresent its rates and services. IDT customers who were charged for service after giving the company notice of cancellation also will be eligible for refunds.

Miller said Iowans who have complaints about IDT charges or practices should contact the Consumer Protection Division by calling 515-281-5926 or writing to the Division at the Hoover Building, Des Moines, Iowa 50319.

Miller's office and other states also recently reached agreements with America Online providing refunds to consumers who had difficulty getting access to the service when AOL moved to an unlimited access pricing plan for most customers.

Miller offered some general advice for consumers considering Internet service providers: "Research the company before signing up on the basis of advertising or other promotional pitches," he said. "Find out what it will truly cost to use the system."

He encouraged Iowans to contact his Consumer Protection Division at 515-281-5926 to determine if complaints have been filed against a company.