Connecticut Attorney General's Office

Press Release

Attorney General Announces Settlement With Vonage, Restitution To Consumers

January 21, 2010

Attorney General Richard Blumenthal announced that consumers who have unresolved complaints against Vonage -- an Internet-based phone service -- may be entitled to restitution under a $3 million settlement reached with his office and other attorneys general.

The settlement, reached by Blumenthal in coordination with Department of Consumer Protection (DCP) Commissioner Jerry Farrell, Jr., provides $246,000 to Connecticut taxpayers, in addition to direct refunds to consumers.

Blumenthal urged consumers to contact his office in writing if they have unresolved complaints against Vonage dating as far back as Jan. 1, 2004 that may involve: unauthorized or questionable charges; inability or difficulty in canceling service; and confusion about the need for consumers to already have high-speed Internet service and to purchase additional equipment in order to receive Vonage service.

Such consumers should immediately contact Blumenthal's office in writing before the end of February to allow time for his office to review their complaints and potentially transmit them by March 16, 2010 to Vonage for refunds.

Blumenthal said, "This settlement stops high-pressure practices -- tactics that cornered consumers into unwanted contracts, and provides money directly back to customers. Our investigation revealed a pattern of consumer confusion abetted by Vonage about contract terms and costs for Internet phone service. When consumers felt misinformed and misled, Vonage raised virtually insurmountable obstacles to cancelling contracts.

"I strongly urge consumers wronged by Vonage to take advantage of this settlement and seek restitution -- ranging from $30 to nearly $1,500 -- for unauthorized or unfair charges as soon as possible. Meanwhile, my office will continue to monitor Vonage's practices and compliance with this settlement to ensure fairness going forward. Consumers should contact my office no later than Feb. 28.

Blumenthal was one of the lead attorneys general of a coalition of 32 states in reaching a $3 million settlement with Vonage, one of the nation's largest Internet-based phone service providers, that requires the company to make significant changes to its marketing practices, to honor consumer cancellation requests, and provide refunds to eligible consumers.

Blumenthal's office received more than 40 complaints from consumers who have alleged that they incurred charges that were contrary to Vonage's representations and were unable to cancel their Vonage service or experienced difficulty in cancelling service, which resulted in additional charges.

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 said cancellation was extremely difficult and sometimes impossible.

Blumenthal's multi-state settlement with Vonage strictly limits these practices and requires recording and verification of these retention telephone calls.

The settlement also compels Vonage to revise its disclosures regarding the offer of "free" services, money back guarantees and trial periods. It requires restitution to eligible consumers who previously filed complaints as far back as January 2004, or who file complaints with the Attorney General through the end of February, 2010, which have not been fully resolved.

This settlement is separate and distinct from a settlement that Blumenthal reached with Vonage Holdings Corporation in March 2008 to assure its Internet telephone subscribers have full and fast 911 emergency access. Blumenthal had sued the company for failing to fully inform consumers that their 911 calls could be delayed or not go through.

Vonage subsequently upgraded its system to assure its consumers have the same ease of access to 911 as traditional phone subscribers.

The investigation of the case was led by Connecticut, Illinois, Michigan, Oregon, Pennsylvania, Texas, and Wisconsin. States that also participated in the settlement 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 the Commonwealth of Kentucky.

Consumers should send written complaints to: Attorney General's Office, 55 Elm St., Hartford, CT 06106 marked "Vonage Settlement".