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Company will refund consumers and modify its practices
New Jersey has signed onto a multi-state settlement agreement with Vonage, one of the nation's largest providers of a service known as "Voice over Internet Protocol," an Internet-based phone service, state Attorney General Anne Milgram announced Monday.
The settlement requires Vonage to make significant changes to its marketing practices and procedures for honoring consumer cancellation requests, and to provide refunds to eligible consumers.
A total of 32 states are party to the settlement.
New Jersey previously investigated Vonage business practices on its own, and reached a settlement with the company in 2006 regarding sales and marketing of merchandise. Under that settlement, Vonage agreed to pay the state $45, 945 and comply with state laws, rules and regulations including the state Consumer Fraud Act, state advertising regulations and the Do Not Call Law.
Monday's settlement addresses consumer complaints that Vonage, a Delaware-based corporation with offices in Holmdel, made it difficult or impossible to cancel their Vonage service. Vonage formerly paid incentives to customer service representatives for retaining or "saving" customers when they called to cancel. Monday's agreement puts strict limitations on attempts to dissuade consumers from canceling, and requires recording and verification of consumer cancellation calls.The settlement addresses a number of Vonage marketing practices that 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 agreement puts in place a broad restitution plan requiring Vonage to make refunds to eligible consumers who filed complaints regarding unauthorized charges between January 2004 and March 16, 2010 (CQ).
The state's investigation of the Vonage case was led by Connecticut, Illinois, Michigan, Oregon, Pennsylvania, Texas, and Wisconsin.
In addition to New Jersey, other participants in the settlement are Alabama, Arizona, Arkansas, Florida, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Missouri, Montana, New Hampshire, New Mexico, North Carolina, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Vermont, Washington, West Virginia and Kentucky.
Deputy Attorney General Jeff Koziar of the state Division of Law's Consumer Fraud Prosecution Section handled the Vonage case on behalf of the state.
– TOM HESTER SR., NEWJERSEYNEWSROOM.COM
