Vonage agrees to pay $100 million to settle U.S. FTC lawsuit

WASHINGTON (Reuters) -Communications firm Vonage agreed to pay $100 million to resolve a Federal Trade Commission (FTC) lawsuit that alleged it had failed to provide a simple method for customers to cancel their telephone services, court documents filed Thursday show.

Vonage, which was acquired by Ericsson earlier this year in a $6.2 billion deal, had created obstacles to deter and prevent customers from stopping recurring charges, the FTC said in a lawsuit and proposed settlement in U.S. District Court in New Jersey.

Neither Vonage nor Ericsson immediately responded to a request for comment.

“Since at least 2015, Vonage has failed to provide a simple method for customers to cancel their telephone services, employing a panoply of hurdles, sometimes referred to as

‘dark patterns,’ which compound to deter and prevent customers from stopping recurring charges,” the FTC said in its complaint. “Even when customers have managed to navigate Vonage’s process and have reached a live agent and canceled their accounts, in many instances, Vonage has continued to charge them without consent.”

In addition to the financial settlement, the company agreed to offer clear disclosures about any recurring charges and to offer a simple method to stop any recurring charge or avoid increased charges, according to a court document.

It also requires that if a consumer signed up for a service on the phone or via a mobile phone application to use that same method to cancel the service, the document said.

(Reporting by David Shepardson and Diane Bartz)