Arizona AG announces $3M settlement with Vonage

Technology
Terry Goddard
Terry Goddard

Vonage must alter its marketing practices, honor consumer cancellation requests and even provide refunds to some customers under a settlement announced today by Arizona Attorney General Terry Goddard that also involves 31 other state attorneys general.

Customers had complained of difficulty dropping their service due to incentives Vonage offered employees who prevented cancellation, as well as confusion over the cost of the company’s equipment and services.

“We cannot allow companies to ignore their customers’ legal rights. Consumers must be treated with decency and not put off or prevented from canceling their phone service,” Goddard said in the announcement, which you can read in full after the jump.

Terry Goddard Announces $3 Million Settlement with VONAGE

(Phoenix, Ariz. – November 16, 2009) Attorney General Terry Goddard announced a $3 million, multi-state settlement with VONAGE, one of the nation’s largest providers of an Internet-based phone service known as “Voice over Internet Protocol.”

The settlement requires VONAGE to make significant changes to its marketing practices, to honor consumer cancellation requests and provide refunds to eligible customers.

The settlement addresses complaints of consumers who said they had difficulty or complete inability to cancel their VONAGE service. VONAGE formerly paid incentives to customer service representatives for retaining or “saving” customers in lieu of cancellation when consumers called to cancel. As a result, consumers reported that cancellation was extremely difficult and sometimes impossible. Today’s agreement puts strict limitations on this practice and requires recording and verification of these telephone calls.

The settlement also addresses a number of other marketing practices, which have led to consumer confusion over the cost of VONAGE equipment and service. Under the agreement, VONAGE will be revising its disclosures regarding the offer of “free” services, money-back guarantees and trial periods.

Further, the settlement puts in place a broad restitution plan requiring VONAGE to make refunds to eligible consumers who filed complaints regarding unauthorized charges from January 2004 to March 16, 2010, which have not been resolved.

“We cannot allow companies to ignore their customers’ legal rights,” Goddard said. “Consumers must be treated with decency and not put off or prevented from canceling their phone service.”

Goddard was joined by 31 other state Attorneys General in this settlement.

A copy of the settlement agreement is attached. For more information, contact Steve Wilson at (602) 542-8351.

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