Case 3:22-cv-06435 Document 2 Filed 11/03/22 Page 1 of 18 PagelD: 25 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW JERSEY 

FEDERAL TRADE COMMISSION, 

Plaintiff, 

V. 

VONAGE HOLDINGS CORP., a corporation; 

VONAGE AMERICA LLC, a limited liability 

company, also d/b/a VON AGE FOR HOME; and 

VONAGE BUSINESS, INC., a corporation, 

Defendants. 

Case No. 3:22-cv-6435 

STIPULATED ORDER FOR 

PERMANENT INJUNCTION, 

MONETARY JUDGMENT, AND 

OTHER RELIEF 

Plaintiff, the Federal Trade Commission ("Commission" or "FTC"), filed its Complaint 

for Permanent Injunction, Monetary Relief, and Other Relief ("Complaint"), for a permanent 

injunction, monetary relief, and other relief in this matter, pursuant to Sections 13(b) and 19 of 

the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. §§ 53(b), 57b, and Section 5 of the 

Restore Online Shoppers' Confidence Act ("ROSCA"), 15 U.S.C. § 8404. Plaintiff and 

Defendants stipulate to the entry ofthis Stipulated Order for Permanent Injunction, Monetary 

Judgment, and Other Relief ("Order") to resolve a ll matters in dispute in this action between 

them. 

T HEREFORE, IT IS ORDERED as follows: 

FINDINGS 

l. This Court has jurisdiction over this matter. 
2. The Complaint charges that Defendants participated in unfair acts or practices in 

violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and ROSCA, 15 U.S.C. § 8404, by failing 

to provide a simple method for consumers to cancel their telephone services, failing to disclose 

material transaction terms before obtaining consumers' billing information, and by charging 

consumers without consent. 

3. Defendants neither admit nor deny any of the allegations in the Complaint, except 

as specifically stated in this Order. Only for purposes of this action, Defendants admit the facts 

necessary to establish jurisdiction. 

4. Defendants waive any claim that they may have under the Equal Access to Justice 

Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the date of this Order, 

and agree to bear their own costs and attorney fees. 

5. Defendants and the Commission waive all rights to appeal or otherwise challenge 

or contest the validity of this Order. 

DEFINITIONS 

For the purpose of this Order, the following definitions apply: 

A. "Billing Information" means any data that enables any person to access a 

customer's account, such as a credit card, checking, savings, share or similar account, utility bill, 

mortgage loan account, or debit card. 

B. "Business Transaction" means a transaction where the consumer is a business 

and the good or service is solely for business use. 

C. "Charge," "Charged," or "Charging" means any attempt to collect money or 

other consideration from a consumer, including causing Billing Information to be submitted for 

payment, including against the consumer's credit card, debit card, bank account, telephone bill, 

or other account. 

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D. "Clear(ly) and conspicuous(ly)" means that a required disclosure is difficult to 

miss (i.e., easily noticeable) and easily understandable by ordinary consumers, including in all of 

the following ways: 

1. In any communication that is solely visual or solely audible, the disclosure 

must be made through the same means through which the communication is presented. In 

any communication made through both visual and audible means, such as a television 

advertisement, the disclosure must be presented simultaneously in both the visual and 

audible portions of the communication even if the representation requiring the disclosure 

is made in only one means. 

2. A visual disclosure, by its size, contrast, location, the length of time it 

appears, and other characteristics, must stand out from any accompanying text or other 

visual elements so that it is easily noticed, read, and understood. 

3. An audible disclosure, including by telephone or streaming video, must be 

delivered in a volume, speed, and cadence sufficient for ordinary consumers to easily 

hear and understand it. 

4. In any communication using an interactive electronic medium, such as the 

Internet or software, the disclosure must be unavoidable. 

5. The disclosure must use diction and syntax understandable to ordinary 

consumers must appear in each language in which the representation that requires the 

disclosure appears. 

6. The disclosure must comply with these requirements in each medium 

through which it is received, including all electronic devices and face-to-face 

communications. 

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7. The disclosure must not be contradicted or mitigated by, or inconsistent 

with, anything else in the communication. 

8. When the representation or sales practice targets a specific audience, such 

as children, the elderly, or the terminally ill, "ordinary consumers" includes reasonable 

members of that group. 

E. "Defendants" means all of the Defendants, individually, collectively, or in any 

combination. 

F. "Negative Option Feature" means, in an offer or agreement to sell or provide 

any good or service, a provision under which the consumer's silence or failure to take affirmative 

action to reject a good or service or to cancel the agreement is interpreted by the seller or 

provider as acceptance or continuing acceptance of the offer. 

G. "Telemarketing" means any plan, program, or campaign which is conducted to 

induce the purchase of goods or services by use of one or more telephones, and which involves a 

telephone call, whether or not covered by the Telemarketing Sales Rule. 

ORDER 

I. EXPRESS INFORMED CONSENT 

IT IS FURTHER ORDERED that Defendants and Defendants' officers, agents, 

employees, and attorneys, and all other persons in active concert or participation with any of 

them, who receive actual notice of this Order, whether acting directly or indirectly, in connection 

with promoting, offering for sale, or sale of any good or service, are permanently restrained and 

enjoined from causing any Charge to be billed to a consumer's account without the consumer's 

express informed consent. To obtain express informed consent for any good or service with a 

Negative Option Feature, Defendants must: 

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A. For all written offers (including over the Internet, such as through a web-based 

application), obtain consent through a check box, signature, or other substantially similar 

method, which the consumer must affirmatively select or sign to accept the Negative Option 

Feature, and no other portion of the offer. Defendants shall disclose Clearly and Conspicuously, 

and immediately adjacent to such check box, signature, or substantially similar method of 

affirmative consent, only the following, with no additional information: 

1. The extent to which the consumer must take affirmative action to avoid 

any Charges: a) for the offered good or service, b) of an increased amount after the trial 

or promotional period ends, and c) on a recurring basis; 

2. The total cost (or range of costs) the consumer will be Charged and, if 

applicable, the frequency of such Charges unless the consumer timely takes affirmative 

steps to prevent or stop such Charges; and 

3. The deadline(s) (by date or frequency) by which the consumer must 

affirmatively act in order to stop all recurring Charges. 

B. For all oral offers, prior to obtaining any Billing Information from the consumer: 

1. Clearly and Conspicuously disclose the information contained in 

Subsection B of the Section III of this Order titled Required Disclosures Relating To 

Negative Option Features; and 

2. Obtain affirmative unambiguous express oral confirmation that the 

consumer: a) consents to being Charged for any good or service, including providing, at a 

minimum, the last 4 digits of the consumer's account number to be Charged, b) 

understands that the transaction includes a Negative Option Feature, and c) understands 

the specific affirmative steps the consumer must take to prevent or stop further Charges. 

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C. For transactions conducted through Telemarketing, Defendants shall maintain for 

3 years from the date of each transaction an unedited voice recording of the entire transaction, 

including the prescribed statements set out in Subsection B of this Section. Each recording must 

be retrievable by date and by the consumer's name, telephone number, or Billing Information, 

and must be provided upon request to the consumer, the consumer's bank, or any law 

enforcement entity. 

Provided that Subsections A through C of this Section do not apply to Business 

Transactions for which Defendants possess evidence that consumers provided express informed 

consent to being billed for the good or service with a Negative Option Feature after negotiating 

significant terms of the Negative Option Feature that are only negotiable with business 

consumers. 

II. SIMPLE MECHANISM TO CANCEL NEGATIVE OPTION FEA TORE 

IT IS ORDERED that Defendants, Defendants' officers, agents, employees, attorneys, 

and all other persons in active concert or participation with any of them, who receive actual 

notice of this Order, whether acting directly or indirectly, in connection with promoting or 

offering for sale any good or service with a Negative Option Feature, are permanently restrained 

and enjoined from: 

A. failing to provide a simple mechanism for the consumer to: (1) avoid being 

Charged, or Charged an increased amount, for a good or service and (2) immediately stop any 

recurring Charge. Such mechanism must: 

1. be easy to find; 

2. be easy to use to stop such Charge; 

3. not require the consumer to take any action that is objectively unnecessary 

to cancel including using a Dark Pattern. A "Dark Pattern" refers to a user interface that 

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has the effect of impeding consumers' expression of preference, manipulating consumers 

into taking certain action or otherwise subverting consumers' choice; 

B. If any consumers entered into the agreement to purchase a good or service 

including a Negative Option Feature over the Internet or a mobile phone application, failing to 

provide the mechanism through the same website, email address or other application that the 

consumers used to enter the agreement. 

C. If any consumers entered into the agreement to purchase a good or service 

including a Negative Option Feature through an oral offer or acceptance, failing to provide such 

mechanisms through the use of (1) a telephone number and (2) a postal or email address. 

Provided, however, that Section II does not apply to Business Transactions for which 

Defendants possess evidence that consumers negotiated significant terms of the Negative Option 

Feature that are only negotiable with business consumers. 

III. REQUIRED DISCLOSURES RELATING TO NEGATIVE OPTION FEATURES 

IT IS FURTHER ORDERED that Defendants, Defendants' officers, agents, employees, 

and attorneys, and all other persons in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, in connection with 

promoting or offering for sale any good or service with a Negative Option Feature, are 

permanently restrained and enjoined from: 

A. Representing directly or indirectly, expressly or by implication, that any good or 

service that includes a Negative Option Feature is being offered on a free, trial, no obligation, 

reduced, upgraded, or discounted basis, or for a specific term, without disclosing Clearly and 

Conspicuously, and immediately adjacent to, any such representation: 

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1. The extent to which the consumer must take any affirmative action to 

avoid any Charges: a) for the offered good or service, b) of an increased amount after 

the trial or promotional period ends, and c) on a recurring basis; 

2. The total cost (or range of costs) the consumer will be Charged and, if 

applicable, the frequency of such Charges unless the consumer timely takes steps to 

prevent or stop such Charges; and 

3. The deadline(s) (by date or frequency) by which the consumer must 

affirmatively act in order to stop all recurring Charges. 

B. Obtaining Billing Information from a consumer for any transaction involving a 

good or service that includes a Negative Option Feature, without first disclosing Clearly and 

Conspicuously, and immediately adjacent to where a consumer provides Billing Information: 

1. The extent to which the consumer must take affirmative action to avoid 

any Charges: a) for the offered good or service, b) of an increased amount after the 

trial or promotional period ends, and c) on a recurring basis; 

2. The total cost (or range of costs) the consumer will be Charged, the date 

the initial Charge will be submitted for payment, and, if applicable, the frequency of such 

Charges unless the consumer timely takes affirmative steps to prevent or stop such 

Charges; 

3. The deadline(s) (by date or frequency) by which the consumer must 

affirmatively act in order to stop all recurring Charges; 

4. The name of the seller or provider of the good or service and, if the name 

of the seller or provider will not appear on billing statements, the billing descriptor that 

will appear on such statements; 

5. A description of the good or service; 

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6. Any Charge or cost for which the consumer is responsible in connection 

with the cancellation of an order, any service or the return of any good; and 

7. The simple cancellation mechanism to stop any recurring Charges, as 

required by Section II of this Order. 

C. Failing to send the consumer: 

1. Immediately after the consumer's submission of an online order, written 

confirmation of the transaction by email. The email must Clearly and Conspicuously 

disclose all the information required by Subsection B, and contain a subject line reading 

"Order Confirmation" along with the name of the good or service and the subject line 

must contain no additional information; or 

2. Within 2 days after receipt of the consumer's order by mail or telephone, a 

written confirmation of the transaction, either by email or first class mail. The email or 

letter must Clearly and Conspicuously disclose all the information required by Subsection 

B. The subject line of the email must Clearly and Conspicuously state "Order 

Confirmation" along with the name of the good or service, and nothing else. The outside 

of the envelope must Clearly and Conspicuously state "Order Confirmation" along with 

the name of the product or service, and no additional information other than the 

consumer's address, the Defendants' return address, and postage. 

Provided, however, that Section III does not apply to Business Transactions for which 

Defendants possess evidence that consumers negotiated significant terms of the Negative 

Option Feature that are only negotiable with business consumers. 

IV. PROHIBITION AGAINST MISREPRESENTATIONS 

IT IS FURTHER ORDERED that Defendants, Defendants' officers, agents, employees, 

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and attorneys, and all other persons in active concert or participation with any of them, who 

receive actual notice of this Order, whether acting directly or indirectly, in connection with 

promoting or offering for sale any good or service with a Negative Option Feature are 

permanently restrained and enjoined from misrepresenting expressly or by implication: 

A. Any cost to the consumer to purchase, receive, use, or return the initial 

good or service; 

B. That the consumer will not be Charged for any good or service; 

C. That a good or service is offered on a "free," "trial," "sample," "bonus," 

"gift," "no obligation," "discounted," "upgraded" basis, or words of similar import, 

denoting or implying the absence of an obligation on the part of the recipient of the offer 

to affirmatively act in order to avoid Charges, including where a Charge will be assessed 

pursuant to the offer unless the consumer takes affirmative steps to prevent or stop such a 

Charge; 

D. That the consumer can obtain a good or service for a processing, service, 

shipping, handling, or administrative fee with no further obligation; 

E. Any purpose for which the consumer's Billing Information will be used; 

F. The date by which the consumer will incur any obligation or be Charged 

unless the consumer takes an affirmative action on the Negative Option Feature; 

G. That a transaction has been authorized by the consumer; 

H. Any material aspect of the nature or terms of a refund, cancellation, 

exchange, or repurchase policy for the good or service, including whether it is easy for 

consumers to cancel Defendants' good or service; or 

I. Any other material fact. 
V. MONETARY JUDGMENT 

IT IS FURTHER ORDERED that: 

A. Judgment in the amount of One Hundred Million Dollars ($100,000,000.00) is 

entered in favor of the Commission against Defendants, jointly and severally, as monetary relief. 

B. Defendants are ordered to pay to the Commission One Hundred Million Dollars 

($100,000,000.00). Such payment must be made within 7 days of entry of this Order by 

electronic fund transfer in accordance with instructions previously provided by a representative 

of the Commission. 

C. Defendants relinquish dominion and all legal and equitable right, title, and interest 

in all assets transferred pursuant to this Order and may not seek the return of any assets. 

D. The facts alleged in the Complaint will be taken as true, without further proof, in 

any subsequent civil litigation by or on behalf of the Commission, including in a proceeding to 

enforce its rights to any payment or monetary judgment pursuant to this Order, such as a 

nondischargeability complaint in any bankruptcy case. 

E. The facts alleged in the Complaint establish all elements necessary to sustain an 

action by the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy Code, 11 

U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect for such purposes. 

F. Defendants acknowledge that their Taxpayer Identification Numbers (Social 

Security Numbers or Employer Identification Numbers), which Defendants previously submitted 

to the Commission, may be used for collecting and reporting on any delinquent amount arising 

out of this Order, in accordance with 31 U.S.C. §7701. 

G. All money received by the Commission as monetary relief pursuant to this Order 

may be deposited into a fund administered by the Commission or its designee to be used for 

consumer relief, such as redress and any attendant expenses for the administration of any redress 

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fund. If a representative of the Commission decides that direct redress to consumers is wholly or 

partially impracticable or money remains after such redress is completed, the Commission may 

apply any remaining money for such related relief (including consumer information remedies) as 

it determines to be reasonably related to Defendants' practices alleged in the Complaint. Any 

money not used for relief is to be deposited to the U.S. Treasury. Defendants have no right to 

challenge any actions the Commission or its representatives may take pursuant to this 

Subsection. 

VI. CUSTOMER INFORMATION 

IT IS FURTHER ORDERED that Defendants, Defendants' officers, agents, 

employees, and attorneys, and all other persons in active concert or participation with any of 

them who receive actual notice of this Order, whether acting directly or indirectly are 

permanently restrained and enjoined from directly or indirectly failing to provide sufficient 

customer information to enable the Commission to efficiently administer consumer redress. If 

a representative of the Commission requests in writing any information related to redress, 

Defendants must provide it, in the form prescribed by the Commission, within 14 days. 

VII. ORDER ACKNOWLEDGMENTS 

IT IS FURTHER ORDERED that Defendants obtain acknowledgments ofreceipt of this 

Order: 

A. Each Defendant, within 7 days of entry of this Order, must submit to the 

Commission an acknowledgment ofreceipt of this Order sworn under penalty of perjury. 

B. For 5 years after entry of this Order, each Defendant, must deliver a copy of 

this Order to: (1) all principals, officers, directors, and LLC managers and members; (2) all 

employees, agents, and representatives having managerial responsibilities for conduct related 

to the subject matter of the Order; and (3) any business entity resulting from any change in 

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structure as set forth in the Section titled Compliance Reporting. Delivery must occur within 7 

days of entry of this Order for current personnel. For all others, delivery must occur before or 

at the time they assume their responsibilities. 

C. From each individual or entity to which a Defendant delivered a copy of this 

Order, that Defendant must obtain, within 30 days, a signed and dated acknowledgment of 

receipt of this Order. 

VIII. COMPLIANCE REPORTING 

IT IS FURTHER ORDERED that Defendants make timely submissions to 

the Commission: 

A. One year after entry of this Order, each Defendant must submit a compliance 

report, sworn under penalty of perjury. Each Defendant must: 

1. identify the primary physical, postal, and email address and telephone 

number, as designated points of contact, which representatives of the Commission may 

use to communicate with Defendant; 

2. identify all of that Defendant's businesses by all of their names, 

telephone numbers, and physical, postal, email, and Internet addresses; 

3. describe the activities of each business, including the goods and 

services offered, the means of advertising, marketing, and sales, and the involvement of 

any other Defendant; 

4. describe in detail whether and how that Defendant is in compliance 

with each Section of this Order; and 

5. provide a copy of each Order Acknowledgment obtained pursuant to 

this Order, unless previously submitted to the Commission. 

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B. For 12 years after entry of this Order, each Defendant must submit a compliance 

notice, sworn under penalty of perjury, within 14 days of any change in the following: 

1. any designated point of contact; or 

2. the structure of any Defendant or any entity that Defendant has any 

ownership interest in or controls directly or indirectly that may affect compliance 

obligations arising under this Order, including: creation, merger, sale, or dissolution of 

the entity or any subsidiary, parent, or affiliate that engages in any acts or practices 

subject to this Order. 

C. Each Defendant must submit to the Commission notice of the filing of any 

bankruptcy petition, insolvency proceeding, or similar proceeding by or against such Defendant 

within 14 days of its filing. 

D. Any submission to the Commission required by this Order to be sworn under 

penalty of perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by 

concluding: "I declare under penalty of perjury under the laws of the United States of America 

that the foregoing is true and correct. Executed on: __ " and supplying the date, signatory's 

full name, title (if applicable), and signature. 

E. Unless otherwise directed by a Commission representative in writing, all 

submissions to the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or 

sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, 

Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, 

Washington, DC 20580. The subject line must begin: FTC v. Vonage Holdings Corp., FTC 

Matter No. 2023165. 

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IX. RECORDKEEPING 

IT IS FURTHER ORDERED that Defendants must create certain records for 12 years 

after entry of the Order and retain each such record for 5 years. Specifically, Defendants must 

create and retain the following records: 

A. accounting records showing the revenues from all goods or services sold; 

B. personnel records showing, for each person providing services in relation to any 

aspect of the Order, whether as an employee or otherwise, that person's: name; addresses; 

telephone numbers; job title or position; dates of service; and (if applicable) the reason for 

termination; 

C. records of all consumer complaints and refund requests, whether received directly 

or indirectly, such as through a third party, and any response; 

D. all records necessary to demonstrate full compliance with each provision of this 

Order, including all submissions to the Commission; and 

E. a copy of each unique advertisement or other marketing material, and a copy of 

each part of Defendants' websites related to the subject matter of this Order. 

X. COMPLIANCE MONITORING 

IT IS FURTHER ORDERED that, for the purpose of monitoring Defendants' compliance 

with this Order: 

A. Within 14 days of receipt of a written request from a representative of the 

Commission, each Defendant must: submit additional compliance reports or other requested 

information, which must be sworn under penalty of perjury; appear for depositions; and produce 

documents for inspection and copying. The Commission is also authorized to obtain discovery, 

without further leave of court, using any of the procedures prescribed by Federal Rules of Civil 

Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69. 

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B. For matters concerning this Order, the Commission is authorized to communicate 

directly with each Defendant. Defendants must permit representatives of the Commission to 

interview any employee or other person affiliated with any Defendant who has agreed to such 

an interview. The person interviewed may have counsel present. 

C. The Commission may use all other lawful means, including posing, through its 

representatives as consumers, suppliers, or other individuals or entities, to Defendants or any 

individual or entity affiliated with Defendants, without the necessity of identification or prior 

notice. Nothing in this Order limits the Commission's lawful use of compulsory process, 

pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-l. 

XI. RETENTION OF JURISDICTION 

IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for 

purposes of construction, modification, and enforcement of this Order. 

SO ORDERED this day of ______ , 202_. 

UNITED STATES DISTRICT JUDGE 

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Case 3:22-cv-06435 Document 2 Filed 11/03/22 Page 17 of 18 PagelD: 41 

SO STIPULATED AND AGREED: 

FEDERAL TRADE COMMISSION 

~ C?aL November 3, 2022 Date: 

STEPHANIE LIEBNER 

Email: sliebner@ftc.gov 

ANGEL REYES 

Email: areyes@ftc.gov 

Attorneys 

Gregory A. Ashe Email: gashe@ftc.gov 

FEDERAL TRADE COMMISSION 

600 Pennsylvania Ave., NW 

Mailstop CC-10232 

Washington, DC 20580 

Telephone: (202) 326-2908 (Liebner) 

Facsimile: (202) 326-3768 

DEFENDANTS 

~J?S~ Date: September l7, 2022

Randy K. Ruth~ 

VONAGE HOμ:i GS CORP. 

Chief Legal 6tticer & Secretary 

VONAGE AMERICA LLC 

Vice President & Secretary 

VONAGE BUSINESS INC. 

Vice President & Secretary 

Email: randy. rutherford@vonage.com 

Telephone: (732) 444 4613 

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Case 3:22-cv-06435 Document 2 Filed 11/03/22 Page 18 of 18 PagelD: 42 

Duane C. Pozza. 

Mruk B. Sweet 

Wiley Rein LLP 

Attorneys for Defendants Date: 9/23/2022 

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