Some Vonage customers may get a cut of a $100 million fine

Photo (c) Krisanapong Detraphiphat - Getty Images

The FTC charges the company makes it nearly impossible for customers to cancel

If you have been a Vonage customer and found it nearly impossible to cancel the service, the Federal Trade Commission (FTC) may have some money for you.

The agency has gone to court to stop Vonage, which provides internet phone service, from imposing “junk” fees and creating obstacles for those who try to cancel their service. The FTC alleges that the company used dark patterns to make it difficult for consumers to cancel and often continued to illegally charge them even after they spoke to an agent directly and requested cancellation. 

The FTC has negotiated a court order that, if approved, would require Vonage to pay $100 million in refunds to consumers harmed by the company’s actions. The company would also be required to make its cancellation process simple and transparent, and stop charging consumers without their consent.

“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.”

The FTC has previously served notice on companies that sell subscriptions that they must offer “clear and conspicuous” instructions for customers who want to cancel the service. A year ago the FTC issued a new policy enforcement statement that warned companies not to deploy illegal dark patterns that trick or trap consumers into subscription services. 

Rising number of complaints

At the time, the FTC said the move was a response to a rising number of complaints about the financial harms caused by deceptive sign-up tactics, including unauthorized charges or ongoing billing that is impossible to cancel.

The FTC’s policy statement puts companies on notice that they will face legal action if their sign-up process fails to provide clear, up-front information, obtain consumers’ informed consent, and make cancellation easy. The FTC said the action against Vonage is a result of that policy.

The FTC complaint against Vonage contends the company has harmed consumers by:

  • Eliminating cancelation options

  • Making the cancelation process difficult to complete

  • Imposing “junk” fees when customers do cancel

  • Continuing the charge customers even after they cancel

If the agreement is approved by the court, Vonage will pay the FTC $100 million. The agency will then distribute the money to consumers.

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