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Vonage Required to Pay $100 Million in Refunds to Consumers Who Faced Difficulties Cancelling Service

  • The FTC reached a settlement agreement with internet phone service provider Vonage America LLC and affiliate entities (collectively, “Vonage”) to resolve allegations that the company failed to provide required disclosures and simple mechanisms for customers to cancel their telephone services and charged customers without their consent.
  • According to the complaint, Vonage allegedly employed deceptive user interfaces that are sometimes called “dark patterns” to prevent customers from cancelling recurring charges. For example, the FTC alleges that, while the sign-up process for service was easily completed online, the company required cancelling customers to speak to a live agent by phone during limited working hours. In addition, the FTC claims the cancellation process was further complicated by obscured contact information, circuitous and redundant procedural requirements, long wait times, dropped or unanswered calls, lengthy and repeated sales pitches, and unexpected high-dollar early termination fees. According to the FTC, customers who successfully navigated these requirements were still charged without consent following their attempted cancellation.
  • Under the terms of the settlement, Vonage must pay $100 million to the FTC to be used for consumer relief. In addition, the company is prohibited from making misrepresentations in connection with the promotion or sale of any product with a negative option feature and must obtain express, informed consent before charging consumers. Vonage must also be upfront with customers about the terms of any subscription plans, stop using dark patterns to frustrate customer cancellation efforts, and simplify its cancellation process to allow customers to cancel a product or service using the same method they used to enroll.
  • Our own Ann-Marie Luciano and Emily Yu recently penned this article for Law360 providing a deeper dive into the interest of the FTC and AGs into companies’ use of dark patterns, and offering practical guidance to help businesses minimize enforcement risk..