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Attorney General's News Release

November 17, 2009

Attorney General Koster announces settlement with Vonage regarding cancellation issues

Jefferson City, Mo. -- Attorney General Chris Koster today announced Missouri is part of a multi-state settlement with VONAGE, one of the nation's largest providers of a service known as "Voice over Internet Protocol," an Internet-based phone service.  Koster said the settlement requires VONAGE to make significant changes to its marketing practices, honor consumer cancellation requests, and provide refunds to eligible consumers.

"I am pleased to announce this settlement on behalf of Missouri consumers," Koster said.  "Companies that prey on customers who have done business with them in good faith should not be allowed to take advantage of customers when they legally choose to cancel that business relationship.  This settlement is a big win for consumers."

Koster said today's settlement addresses complaints in which consumers alleged having difficulty or being unable to cancel their VONAGE service.  VONAGE formerly paid incentives to customer service representatives for retaining or "saving" customers in lieu of cancellation whenever the 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

Koster said today's settlement also addresses a number of other marketing practices that have led to consumer confusion about the cost associated with VONAGE equipment and service.  Specifically, VONAGE will revise its disclosures regarding the offer of "free" services, money-back guarantees, and trial periods.   

Koster said the settlement puts in place a broad restitution plan requiring VONAGE to make refunds to eligible consumers who filed unresolved complaints regarding unauthorized charges from January 2004, to March 16, 2010.

Missouri's share of the settlement payment made by Vonage is $45,000.  That money may be used to cover attorneys' fees and costs, for enforcement of state consumer protection laws, or for consumer education.

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