America Online has agreed to pay $1.25 million to settle charges that its agents ignored cancellation requests in a case that highlights how far companies are willing to go to keep customers.

AOL, the world’s biggest Internet service provider, withheld bonuses from “retention consultants” who could not change the mind of at least half of those who called to cancel, according to a settlement agreement between the company and New York Attorney General Eliot Spitzer.

 With thousands of dollars in monthly bonuses at stake, some agents who could not persuade a customer to stay simply did not process the cancellation order, Spitzer said.

Although AOL’s case was extreme, aggressive tactics for keeping customers are becoming increasingly common, say consumer advocates who field complaints from people frustrated with how difficult it can be to cancel a wide range of services.

Providers of phone and Internet plans, credit cards, cable TV as well as newspapers and magazines do everything they can to keep customers from leaving.

Stiffer competition and the national Do Not Call registry, which blocks more than 100 million numbers from telemarketers, make it harder for many businesses to win new customers — so they’re trying harder to hold on to the ones they have.

Their tools: Pushy customer service representatives, hidden charges and early-termination fees.

“It’s very clear that these are blockades keeping consumers from making competitive choices to move to another company,” said Morgan Jindrich, a Consumers Union official who runs a Web site dedicated to airing gripes about telecommunications industry practices.

Jindrich, for instance, said she tried to cancel her cable TV service because she was moving. The automated phone prompts eventually led to an instruction to leave a recorded message with her name, address and date she wished to have her service suspended.

Five months later, she’s still waiting.

However difficult it might be, eing in position to quit a service in favor of a competitor is a relatively new phenomenon, the result of explosive growth in a host of services.

For instance, when telephone service was a monopoly, the only option disgruntled customers had was to go without a phone. Prior to satellite service, unhappy cable subscribers could dust off their rabbit-ear TV antennas.

Now, though, cable companies compete for subscribers with satellite operators. Phone companies struggle to keep customers from defecting to wireless phones or even the Internet.

AOL, once the easiest way to get online, has watched its subscription base fall as the rollout of high-speed Internet access trumps its standard dial-up service.

Long before this latest settlement, AOL had earned a reputation as notoriously difficult to cancel. Frustrated members have dubbed its customer service “AO-Hell.”

AOL, owned by Time Warner Inc., has reason to fight for every customer. Although still the largest online service, AOL has lost 5 million customers in the past three years — down to 21 million during the second quarter from a peak of 26.7 million.

Spitzer’s office launched the investigation after about 300 New Yorkers complained that AOL kept charging for service after they had requested a cancellation.

AOL did not admit wrongdoing in the Spitzer case, nor in previous settlements with the Federal Trade Commission and Ohio State Attorney General over similar allegations. The company agreed to provide New Yorkers refunds for up to four months of service, but will change its customer service practices for the entire country.

It will stop tying bonuses to minimum “save” rates and to use a third company to verify cancellation requests.