The parties have reached a nationwide $525,000 settlement in a class action against America Online, Inc. and Talk America, Inc. on behalf of all persons who signed up for long-distance telephone service with Talk America pursuant to a "free AOL" offer, at any time between December 3, 1997, and October 1, 2001. The action alleged that AOL breached the parties' contracts and violated certain provisions of California law when it failed to provide AOL Rewards points that could be used for one or more free months of America Online service to customers who contracted for AOL Long Distance telephone service provided by Talk America. Class members must submit claim forms by August 1, 2003, in order to be eligible to take part in the settlement.

The class is specifically composed of current and former AOL customers who signed up for the Talk America program and made at least one payment under that program but who did not receive any of the AOL Rewards points to which they were entitled under the program. The settlement provides for each eligible class member to receive a credit equivalent to one free month of AOL's standard, narrowband service. The credit does not include telephone charges, premium surcharges or similar charges. Class members who are not current AOL users will receive a similar credit, but will have to subscribe to AOL to use it. The credit will be considered in addition to any marketing promotion that AOL is currently offering.