The Federal Trade Commission has announced that it will be issuing refunds totaling nearly $100 million to customers of Vonage. This decision comes after the agency cited the internet phone service provider for misconduct.
The company unfairly imposed unnecessary charges on customers and employed deceptive tactics to manipulate their behavior.
To create difficulties for them in terminating their service.
The Federal Trade Commission (FTC) announced on Monday that Vonage, a company owned by Ericsson and based in New Jersey, has agreed to provide reimbursements to approximately 390,000 customers who were negatively affected by their actions. Additionally, they have committed to streamlining their subscription cancellation process and will no longer charge customers without their explicit consent.
The majority of reimbursements will be distributed in the form of a physical check. Those who qualify for reimbursements but do not have registered mailing addresses with the FTC will receive the funds via the payment service PayPal.
The FTC has filed a complaint against Vonage for consistently charging customers without their permission. This was done by enrolling them in plans that start with a free trial, but then require individuals to cancel in order to avoid being charged.
The agency accused the company of making it significantly harder to cancel their services. This involved making customers speak to a live agent on the phone in order to cancel their plans. Regulators also noted that it was challenging for customers to locate the necessary phone number to cancel their service with Vonage.
Vonage implemented additional charges, referred to as “junk fees,” to the invoices of clients who attempted to terminate their contracts. These fees were labeled as “termination fees,” but some customers were still charged even after canceling their subscriptions.
regarding the use of non-public information in the sale of consumer data.
The FTC has suggested a regulation concerning the utilization of confidential information in the transaction of consumer data.
Businesses that overcharge consumers will be required to reimburse them and will face a fine of $50,000 for each violation. This rule was recently announced by California Governor Gavin Newsom.
A new regulation will prohibit unnecessary charges in the state beginning on July 1, 2024.
Americans rack up
The Consumer Financial Protection Bureau reports that individuals are charged fees for various services, ranging from reserving hotel accommodations and purchasing tickets for events to leasing an apartment and obtaining fundamental details about their bank account.
Thank you for choosing to read CBS NEWS.
Create your free account or log in
for more features.