Kathleen G. Kane - Pennsylvania Office of Attorney General - Protecting Pennsylvanians

  

November 16, 2009

Attorney General Corbett announces $3 million multi-state settlement with Vonage; consumers eligible for refunds

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HARRISBURG - Attorney General Tom Corbett today announced a $3 million multi-state consumer protection agreement with Vonage, a New Jersey-based company that provides Voice over Internet Protocol (VoIP) telephone services.

Corbett said the settlement follows an investigation into complaints about the marketing of Vonage services, including confusion about availability and cost, along with advertisements involving "free" services, money back guarantees and trial periods.  The consumer protection agreement also addresses complaints that some consumers were prevented from cancelling their Vonage service.

"Consumers deserve clear and accurate information about prices, promotions and service limitations before they make a purchase," Corbett said. "This agreement will enhance the information available to consumers who are evaluating Internet telephone services and will also provide refunds to Vonage customers who have encountered problems."

Corbett said the Assurance of Voluntary Compliance (AVC) with Vonage requires the company to issue refunds to Pennsylvania consumers who have filed valid complaints with the Attorney General's Bureau of Consumer Protection dating back to January 1, 2004, along with any new complaints that are filed within the next 120 days.  

Consumers with complaints involving Vonage can call the Attorney General's Consumer Protection Hotline at 1-800-441-2555 or complete an online consumer complaint form.

In addition to consumer refunds, the AVC requires a number of changes in Vonage marketing practices in order to avoid consumer confusion - including clear and conspicuous disclosures about "free service" promotions, money back guarantees and trial periods. 

Some consumers complained that cancellation was extremely difficult or sometimes impossible.  In order to prevent such cancellation problems in the future, the consumer protection agreement limits the use of paid incentives for customer service representatives who prevent a certain number of consumers from cancelling their Vonage services.

Along with consumer refunds, the AVC requires Vonage to pay a total of $3 million to the investigating states.  This includes a payment of $249,000 to the Attorney General's Bureau of Consumer Protection, which will be used to support future consumer protection, enforcement and consumer education activities in Pennsylvania.

The Assurance of Voluntary Compliance was filed today in Commonwealth Court by Senior Deputy Attorney General John M. Abel and Deputy Attorney General Margie A. Anderson of the Attorney General's Bureau of Consumer Protection.

Corbett said the investigation of the case was led by a seven state group, including Pennsylvania, Connecticut, Illinois, Michigan, Oregon, Texas, and Wisconsin.   Other states participating in this agreement include Alabama, Arizona, Arkansas, Florida, Hawaii, Idaho, Indiana, Kansas, Louisiana, Maine, Missouri, Montana, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, South Carolina, South Dakota, Tennessee, Vermont, Washington, West Virginia, and Kentucky.