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Company will refund consumers and modify its cancellation and retention practices
MADISON - Attorney General J.B. Van Hollen announced today that he, along with 31 other states reached a $3 million settlement with VONAGE, one of the nation's largest providers of a service known as "Voice over Internet Protocol," an Internet-based phone service. The settlement is the result of a two-year multistate investigation led by the State of Wisconsin. The State of Wisconsin will receive $408,000 as a result of this settlement.
The settlement, which will become effective upon entry of a Consent Judgment by the Dane County Circuit Court, also requires VONAGE to make significant changes to its marketing practices and honoring of consumer cancellation requests, as well as provide extensive refunds to eligible consumers.
"Companies who make representations about price and service need to make those representations clear and hold up their end of the bargain," said Wisconsin Attorney General J.B. Van Hollen. "Today's agreement with Vonage requires disclosures to prevent future communication breakdowns and ensures that consumers who are owed money are paid."
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, 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.
Today's settlement also addresses a number of other marketing practices, which 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 settlement puts in place a broad restitution plan requiring VONAGE to make refunds to eligible consumers who filed complaints regarding unauthorized charges with the Attorney General or Wisconsin Department of Agriculture Trade and Consumer Protection from January 2004 until 120 days after the effective date of the settlement. Wisconsin residents who have not submitted complaints to either agency, but believe they are eligible for refunds, should file a complaint by downloading a claim form, or completing the claim form on-line at www.doj.state.wi.us/dls/vonage/ [link no longer available]. Consumers can also call (608) 266-8940 Monday through Friday between 8 a.m. and 5 p.m. Central Standard Time to request a form by mail.
The investigation of the case was led by Wisconsin and six other states including Connecticut, Illinois, Michigan, Oregon, Pennsylvania, and Texas. The other participants in today's settlement are the states of 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.
Assistant Attorney General Lara A. Sutherlin represented the State in this case, and investigative assistance was provided by the Wisconsin Department of Agriculture, Trade and Consumer Protection.