Vonage Will Pay $100 Million to Settle FTC Allegations of Trapping Consumers in Subscriptions

New Jersey-based Vonage will be required to obtain consumers’ express consent for services and simplify its cancelation process. The cost of a subscription ranged from $5 to $50 a month for consumers, and potentially thousands a month for businesses, the FTC said. The commission said it received hundreds of complaints from consumers about Vonage’s tactics. 

“This record-breaking settlement should remind companies that they must make cancellation easy or face serious legal consequences,” said

Samuel Levine,

director of the FTC’s Bureau of Consumer Protection. 

The $100 million will be used to refund consumers, the FTC said. 

Vonage didn’t admit wrongdoing as part of the settlement. Representatives for Ericsson and Vonage didn’t immediately respond to requests for comment. 

The Vonage settlement follows a FTC policy statement issued in October 2021 that warned companies against locking consumers into subscriptions using what the commission called “dark patterns,” or tactics that include tricking or trapping customers into paying for goods and services and creating obstacles to canceling. 

The commission said at the time it was ramping up its enforcement in response to a rising number of consumer complaints about deceptive sign-up tactics and unauthorized charges.

“This is different from run-of-the-mill deception,” FTC attorney

Stephanie Liebner

said. “In the new online world, the companies can use consumer data to test what manipulates consumers most effectively.” 

Vonage provided easy ways for consumers to sign up for a phone plan with a free trial online, but then required the customer to call a live agent to cancel—on a company service number that was different from the main customer service line and not easily found on Vonage’s website, the FTC said. The company didn’t transfer people to the correct line or follow through on promises to return calls from consumers seeking to cancel, the commission said. Vonage also charged termination fees that weren’t disclosed, it said.

“They knew they were making people go through hoops on the phone,” Ms. Liebner said. 

The FTC alleged Vonage violated a law that prohibits unfair or deceptive practices in commerce. The commission also alleged the company violated a 2010 law that provided protections for consumers who shop online.

In an earlier case, Age of Learning Inc., which operates children’s online learning program ABCmouse, agreed in 2020 to pay $10 million to settle FTC allegations that it failed to disclose membership terms that led to consumers being charged without their consent. The company didn’t admit wrongdoing. The FTC said it sent refunds to more than 200,000 consumers last year.

Write to Erin Mulvaney at [email protected]