AOL has agreed to cough up as much as $25m to settle a class action lawsuit that alleged the giant ISP "wrongfully billed consumers".

The agreement forms part of a proposed class action settlement reached by the Illinois state court after both sides in the case agreed to mediation conducted by a retired federal judge.

According to a statement issued Friday, the settlement covers claims that AOL "wrongfully billed consumers for online services, such as additional and 'spun-off' AOL accounts, and other services and products, such as AOL Desk Planner, without first receiving consumers' consent or authorization".

The agreement still needs court approval but if given the go-ahead could cost AOL up to $25m.

For its part, AOL "strenuously denies the plaintiffs' allegations, or that a class manageable for trial is certifiable".

However, the Time Warner-owned internet outfit agreed to settle the action "to avoid the burden and expense of litigation", said the statement. ®