Settlement with telecommunications provider Vonage

Press release from the Indiana Attorney General, Greg Zoeller:

Indiana Attorney General Greg Zoeller: Settlement with telecommunications provider Vonage gives consumers clear disclosures and restitution
Company will refund consumers and modify its cancellation and retention practices

INDIANAPOLIS – Indiana Attorney General Greg Zoeller today announced VONAGE Holdings Corp. has agreed to pay restitution to eligible consumers in 32 states. New Jersey-based VONAGE, is also required to make significant changes to the company’s marketing practices and is required to honor consumer cancellation requests. VONAGE provides “Voice over Internet Protocol” or “VOIP” internet-based phone services.

The settlement establishes a broad restitution plan requiring VONAGE to make refunds to eligible consumers who filed complaints regarding unauthorized charges over a six year period from January 2004 and extending to March 16, 2010, which have not been resolved. Complaints about VONAGE’s billing practices submitted to the Indiana Attorney General’s office before March 16, 2010 will be reviewed to determine restitution eligibility.

“I am pleased this agreement achieves our goals of improving protections for consumers. Hoosiers who may have outstanding matters with Vonage should know they have up to four months to submit complaints to my office,” Zoeller said. “The changes VONAGE will be making to their cancellation process and marketing practices are significant and I anticipate the benefits will be lasting.”

Today’s settlement addresses complaints in which consumers reported having difficulty or being unable to cancel their VONAGE service. VONAGE formerly paid incentives to customer service representatives for retaining customers and preventing cancellation. As a result, consumers reported that cancellation was extremely difficult and sometimes impossible. The agreement with the attorneys general puts strict limitations on this practice and requires recording and verification of these telephone calls. Since January 2004, 68 consumer complaints involving VONAGE have been received by the Indiana Attorney General’s office.

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

The amount of restitution VONAGE will pay to Indiana residents will depend on the number of eligible claims submitted.

Visit www.IndianaConsumer.com or call 1-800-382-5516 to file a complaint with the Indiana Attorney General’s office.