The Federal Trade Commission and VoIP provider Vonage reached a settlement over what the FTC says is the carrier’s practice of charging “junk fees” to consumers who wanted to cancel their service. As part of the proposed court order, New Jersey-based Vonage, a subsidiary of Ericsson, will pay $100 million in refunds to consumers harmed by the company’s actions, make its cancellation process simple and transparent, and stop charging consumers without their consent.
The FTC alleged that Vonage made it difficult for consumers to cancel their service, and often continued to illegally charge them “junk fees” even after they spoke to an agent directly and requested cancellation.
“Today, the FTC delivers on our commitment to protect consumers from illegal dark pattern tactics by companies that prevent consumers from canceling their services,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “This record-breaking settlement should remind companies that they must make cancellation easy or face serious legal consequences.”
According to the FTC’s complaint, the company bills customers for these services on an automatic basis every month, either by charging a credit or debit card or withdrawing money from a customer’s bank account directly. Consumer accounts ranged from $5 to around $50 each month, while business accounts could cost up to thousands of dollars a month.
The Commission vote authorizing the staff to file the complaint and proposed final order was 4-0. The FTC filed the complaint and proposed order in the U.S. District Court for the District of New Jersey. Orders have the force of law when approved and signed by the District Court judge, according to the Commission.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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