Office of the Attorney General
Attorney General Conway Announces Agreement With Vonage Regarding Cancellation Issues

Press Release Date:  Monday, November 16, 2009  
Contact Information:  Shelley Catharine Johnson
Deputy Communications Director
502-696-5659 (office)
 


Attorney General Jack Conway, along with the attorneys general of 31 other states, today announced an agreement with Vonage, one of the nation’s largest providers of an Internet-based phone service known as “Voice Over Internet Protocol” (VOIP).  The agreement requires Vonage to make significant changes to its marketing practices and handling of consumer cancellation requests, and provides refunds to eligible consumers.  Vonage will also pay $3 million to the states for reimbursement of legal and investigative costs, of which Kentucky will receive $45,000.

“This agreement will better protect Kentucky consumers by requiring that more information be disclosed,” said General Conway. “For instance, customers who sign up for a trial period with Vonage must be clearly informed whether part of the trial period will be spent waiting for equipment or having their old phone number ported over. They must also be informed of the process and fees for cancellation.”

Today’s agreement addresses complaints in which consumers have claimed difficulty in attempting to cancel their Vonage service, and other issues.  Vonage formerly paid incentives to customer service representatives for retaining or “saving” customers in lieu of cancellation, when consumers called to cancel. As a result, consumers reported that cancellation was extremely difficult and sometimes impossible.  Today’s agreement puts strict limitations on this practice and requires recording and verification of these telephone calls. 

The agreement also addresses a number of other marketing practices which have led to consumer confusion about the costs associated with Vonage equipment and service.  Specifically, Vonage will revise its disclosures for offers of “free” services, money back guarantees and trial periods. 

There is also a broad restitution plan requiring Vonage to make refunds to eligible consumers who have unresolved complaints dating back to January 2004. Consumers may file new complaints on the types of issues listed below through March 16, 2010. 

  • Un-honored “money back guarantees” (because, for instance, the consumer was told they had to leave their account open longer, did not receive equipment from Vonage in time to try the service during a trial period, had trouble returning equipment or was not told of trial period usage limits);
  • Excess usage charges for consumers who were not told of usage limits;
  • Additional monthly service charges because of trouble or difficulty in cancelling service (because, for instance, the account was left open in order to port their phone number to another carrier);
  • Shipping or other fees not disclosed up-front;
  • Monthly service charges or other fees incurred because a consumer was not told up-front they needed broadband or high speed internet service to use VOIP;
  • Charges for service or equipment offered as free, or for discounts offered but not received;
  • Unpaid rebates, or rebates not received because of undisclosed terms and
  • Charges for unordered services.

Kentucky consumers who believe they may be eligible for a refund under this AVC may file a consumer complaint with the Attorney General’s Office of Consumer Protection.  Complaint forms are available online at http://ag.ky.gov/civil/consumerprotection/complaints/forms.htm or can be requested by telephone 1-888-432-9257. 

In addition to Kentucky, the other states participating in this agreement are Alabama, Arizona, Arkansas, Connecticut, Florida, Hawaii, Idaho, Illinois, Indiana, Kansas, Louisiana, Maine, Michigan, Missouri, Montana, New Hampshire, New Jersey, New Mexico, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Vermont, Washington, West Virginia, and Wisconsin. 

A copy of the agreement is available under Featured Links at http://ag.ky.gov/  .