Vonage clients to get practically $100 million in refunds over junk charges

The Federal Commerce Fee is sending Vonage clients a complete of practically $100 million in refunds after the company stated the web telephone service supplier charged consumers junk fees and used “dark patterns” to make it arduous for them to cancel their service. 

Ericsson-owned Vonage, a New Jersey-based supplier of web telephone providers, has agreed to offer refunds to almost 390,000 clients harmed by its actions, simplify its subscription cancellation course of and cease charging shoppers with out their consent, the FTC announced Monday.

Many of the refunds can be despatched by paper test. Customers who’re eligible for refunds however do not need mailing addresses on file with the FTC will obtain the funds by way of fee app PayPal.

Vonage didn’t instantly reply to CBS MoneyWatch’s request for remark. 

In response to a 2022 complaint by the FTC, Vonage commonly charged clients with out their consent by signing them up for plans that start with a free trial however require people to cancel the subscriptions to keep away from costs. 

The corporate made the cancellation course of “markedly tougher” signing up for service, the company alleged. That included forcing clients to cancel their plans by chatting with a stay agent on the telephone. Vonage additionally made it arduous to seek out the telephone quantity they wanted to name to cancel their service, regulators stated.

Vonage additionally added so-called junk charges to the payments of consumers who tried to cancel their plans, labeling them “termination charges” whereas persevering with to cost some customers even after that they had ended their subscriptions. 

The FTC has proposed a rule that would ban junk fees and require companies that wrongly apply costs to refund shoppers. Firms that violate the rule would additionally face a $50,000 penalty per violation. California Gov. Gavin Newsom earlier this month enacted a law that bans junk charges within the state beginning July 1, 2024.

Individuals rack up at least $29 billion annually in charges for all the things from reserving lodge rooms and shopping for occasion tickets to renting an condominium and accessing primary details about your checking account, in line with the Shopper Monetary Safety Bureau.