Case 3:22-cv-06435 Document 1 Filed 11/03/22 Page 1 of 21 PageID: 1 

GREGORY A. ASHE 

STEPHANIE LIEBNER 

ANGEL E. REYES 

FEDERAL TRADE COMMISSION 

600 Pennsylvania Ave., NW 

Washington, DC 20580 

Telephone: (202) 326-3719 (Ashe) 

Telephone: (202)326-2908 (Liebner) 

Telephone: (202) 326-2872 (Reyes) 

Facsimile: (202) 326-3768 

Email: gashe@ftc.gov, sliebner@ftc.gov, areyes@ftc.gov 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

UNITED STATES DISTRICT COURT 

DISTRICT OF NEW JERSEY 

FEDERAL TRADE COMMISSION, Case No. 3:22-cv-6435 

Plaintiff, COMPLAINT FOR PERMANENT 

INJUNCTION, MONETARY 

v. RELIEF, AND OTHER RELIEF 

VONAGE HOLDINGS CORP., a corporation; 

VONAGE AMERICA LLC, a limited liability 

company, also d/b/a VONAGE FOR HOME; and 

VONAGE BUSINESS, INC., a corporation, 

Defendants. 

Plaintiff, the Federal Trade Commission (“FTC”), for its Complaint alleges: 

1. The FTC brings this action under 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, which authorize the FTC to seek, and 

the Court to order, permanent injunctive relief, monetary relief, and other relief for Defendants’ 

acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), and in violation 

Section 4 of ROSCA, 15 U.S.C. § 8403, in connection with Defendants’ failure to provide 

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required disclosures and simple mechanisms for customers to cancel their telephone services and 

charging customers without their consent. 

SUMMARY OF CASE 

2. Vonage advertises and sells communication services, including Voice over 

Internet Protocol (“VoIP”) phone services, to residential and small business consumers. 

Vonage’s services renew automatically, and it charges most customers’ credit cards or debits 

their bank accounts directly and on a recurring basis. 

3. 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. To begin with, although Vonage allows consumers to enroll for services on their own 

and at any time through its website, Vonage has required cancelling customers to speak to a live 

“retention” agent over the phone during limited working hours before processing their request. 

Vonage has made the requirement to cancel via a live agent difficult for customers to satisfy 

through obscured contact information, circuitous and redundant procedural requirements, long 

wait times, dropped or unanswered calls, lengthy and repeated sales pitches, and unexpected 

high-dollar Early Termination Fees (“ETFs”). 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. These actions violate the FTC Act and 

ROSCA. 

JURISDICTION AND VENUE 

4. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1337(a), 

and 1345. 

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5. Venue is proper in this District under 28 U.S.C. § 1391(b)(2), (b)(3), and (c)(2), 

and 15 U.S.C. § 53(b). 

PLAINTIFF 

6. The FTC is an independent agency of the United States Government created by 

the FTC Act, which authorizes the FTC to commence this district court civil action by its own 

attorneys. 15 U.S.C. §§ 41–58. The FTC enforces Section 5(a) of the FTC Act, 

15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. 

The FTC also enforces ROSCA, 15 U.S.C. §§ 8401-05, which, inter alia, prohibits the sale of 

goods or services on the Internet through negative option marketing without meeting certain 

requirements to protect consumers. A negative option is an offer in which the seller treats a 

consumer’s silence – their failure to reject an offer or cancel an agreement – as consent to be 

charged for goods or services. 16 C.F.R. § 310.2(w). 

DEFENDANTS 

7. Defendant Vonage Holdings Corp. (“Vonage Holdings”) is a Delaware 

corporation with its principal place of business at 23 Main Street, Holmdel, New Jersey 07733. 

Vonage Holdings transacts or has transacted business in this District and throughout the United 

States. Vonage Holdings is the parent company of Vonage America LLC and Vonage Business, 

Inc. At all times relevant to this Complaint, acting alone or in concert with others, Vonage 

Holdings has advertised, marketed, distributed, or sold communications services, including VoIP 

services, to consumers and businesses throughout the United States. 

8. Defendant Vonage America LLC (“Vonage America”) is a Delaware limited 

liability company with its principal place of business at 23 Main Street, Holmdel, New Jersey 

07733. Vonage America transacts or has transacted business in this District and throughout the 

United States. At all times relevant to this Complaint, acting alone or in concert with others, 

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Vonage America has been responsible for Vonage Holdings’ residential business throughout the 

United States. 

9. Defendant Vonage Business, Inc. (“Vonage Business”), is a Delaware corporation 

with its principal place of business at 3200 Windy Hill Rd SE, Ste 200E, Atlanta, GA 30339-

8435. Vonage Business transacts or has transacted business in this District and throughout the 

United States. At all times relevant to this Complaint, acting alone or in concert with others, 

Vonage Business has been responsible for Vonage Holdings’ small business services throughout 

the United States. 

COMMON ENTERPRISE 

10. Defendants Vonage Holdings, Vonage America, and Vonage Business 

(collectively, “Vonage” or “Defendants”) have operated as a common enterprise while engaging 

in the deceptive and unfair acts and practices and other violations of law alleged below. 

11. Defendants have conducted the business practices described below through an 

interrelated network of companies that have common ownership, officers, managers, business 

functions, employees, and office locations, and that commingled funds. Because these 

Defendants have operated as a common enterprise, each of them is liable for the acts and 

practices alleged below. 

COMMERCE 

12. At all times relevant to this Complaint, Defendants have maintained a substantial 

course of trade in or affecting commerce, as “commerce” is defined in Section 4 of the FTC Act, 

15 U.S.C. § 44. 

DEFENDANTS’ BUSINESS ACTIVITIES 

13. Since its founding in 2001, Vonage has marketed and sold home phone services to 

residential consumers using VoIP technology. Beginning in 2013, Vonage also began 

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marketing and selling phone services to small business consumers. Customers access and 

utilize Vonage services via their existing internet connections. 

14. Since 2015, Vonage has enrolled consumers into millions of residential and small 

business plans. Vonage’s residential plans generally include a specified number of minutes that 

a customer can use each month and a geographic restriction (e.g., 400 minutes per month 

available to use in the U.S. and Canada). Prices for residential plans range from $4.99 to over 

$50 per month. Vonage’s small business plans are customizable and could include multiple 

communication channels (such as video, voice, messaging, email), equipment, and add-ons, 

based on the size and needs of the business. Prices for Vonage’s business plans can be as high 

as thousands of dollars per month, depending on the size of the business and any add-on services 

selected. 

15. Vonage’s phone services renew automatically, charging consumers on a recurring 

basis unless they take affirmative action to cancel by a certain date. Month-to-month plans are 

renewed and charged monthly unless customers complete Vonage’s cancellation procedures. 

Annual plans either renew for the next year or switch to month-to-month after the initial contract 

period expires, and thereafter are also charged on a monthly basis unless customers are able to 

cancel. 

Vonage Offers a Variety of Enrollment Methods 

16. Residential and business consumers can enroll in Vonage plans either through 

Vonage’s website or by calling Vonage at a toll-free number. 

17. Residential consumers using Vonage’s website to enroll can click the “ORDER 

NOW” button on Vonage’s home page, which directs them to select a plan and input their 

address and payment information. The website enrollment process is available 24/7, takes 

minutes to complete, does not require any interaction with a live agent, and once enrolled, 

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customers can use their online Vonage account to independently manage services, pay bills, 

review call activity, and change plans and features. 

18. Business consumers using Vonage’s website for enrollment similarly may, at any 

time and independently, click on the “See Plans” or “See Pricing” buttons on the website’s home 

page, select the desired plan, pick add-on features, and input address and payment information to 

enroll. 

19. For residential consumers who prefer to enroll by speaking to an agent on the 

telephone, the toll-free enrollment number is advertised prominently in orange writing at the top 

of each page on the Vonage website. 

20. Likewise, business consumers seeking to enroll over the telephone can click the 

prominently displayed “Schedule a meeting” or “Talk to an Expert” buttons located on most 

pages, which bring up a toll-free number they can call or a form they can fill out to have an agent 

call them. 

21. For both residential and business consumers signing up for Vonage’s services 

online or via telephone, enrollment is processed immediately. 

Vonage Has Made It Difficult for Consumers to Cancel 

22. Since at least 2015, Vonage has made its cancellation process more difficult to 

navigate than its enrollment process. 

Vonage Has Allowed Online Enrollment, But Not Online Cancellation 

23. Despite allowing online enrollment for all customers, Vonage did not allow online 

cancellation for any of them between 2017 and 2022. Instead, Vonage restricted customers to a 

single method of cancellation: speaking with a live “retention” agent over the telephone. 

Accordingly, customers requesting cancellation through email or web chat were instructed that 

Vonage “will not accept cancellation via email, fax, SMS or other electronics [sic] methods.” 

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24. Vonage did not inform consumers in the enrollment flow of this restrictive and 

exclusive means of cancellation; rather, the requirement to make a cancellation request only 

through a live agent was buried in Vonage’s lengthy terms of service. 

25. Forcing customers to speak to a live agent to cancel their services has been a 

central component of Vonage’s retention strategy: in early 2017, Vonage deliberately removed 

an online cancellation form previously available for its business customers to reduce 

cancellations and retain more customers. 

26. Vonage’s restrictive method of cancellation runs counter to its own guidance to its 

business clients on effective telecommunication options, which encourages the use of multiple 

communication channels, particularly for issues that consumers can handle on their own. 

Vonage’s guidance states that “not offering other channels practically guarantees a poor 

customer experience” and that “[o]ffering only voice in your contact center won’t cut it in the 

new normal.” Vonage also advises businesses not to “frustrate customers by requiring them to 

contact you for support that should be available on a self-service basis” and that “[i]t should be 

just as easy to return your product as it is to buy it.” 

Vonage Creates Multiple Hurdles for Cancelling Customers 

27. Vonage erects additional roadblocks to prevent customers from cancelling and 

stopping recurring charges. As detailed below, Vonage in numerous instances makes it difficult 

for consumers to find the correct department, cannot connect a customer to a live agent who can 

process the request, does not complete promised call-backs, subjects customers to long hold 

times and aggressive sales pitches, and frequently disconnects calls, requiring customers to 

restart the entire process from the beginning. 

28. First, Vonage does not permit customers to request cancellation via the main 

customer service telephone number prominently displayed on the website. Rather, customers 

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must call a special cancellation telephone number, which is obscured within the website and 

which operates on a more restricted time schedule. Although Vonage agents on the main 

telephone line can sometimes transfer customers from that line to the cancellation line, doing so 

often means that the customer waits in two lengthy hold queues: one to speak with a general 

agent and another to speak with a cancellation agent. 

29. Second, customers calling Vonage’s cancellation line experience multiple 

circuitous transfers and dropped calls. Cancelling customers complained to Vonage about being 

“bounced around between departments” and internal emails between Vonage agents confirm this 

was an issue, with agents discussing the fact that customers are “sent in a circle when they want 

to downgrade or remove the service.” Vonage’s billing task force similarly determined that 

“[c]ancellation flow does not consistently work as expected” and that teams were working “to 

address the backlog of open items.” 

30. Managers from other Vonage departments also acknowledged difficulties 

connecting customers to Vonage’s retention department and multiple failed attempts to cancel 

customers’ accounts. One manager noted, “I would have a rep reach out and offer to transfer him 

directly [to the retention department], but we have been having issues getting smaller accounts 

over to retention via the phone system and I don’t want to run the risk of this customer being even 

angrier.” In another exchange, a different manager messaged the same retention supervisor, 

stating, “I’ve sent this client to the cancel distro a few times now, need your assistance here 

please.” 

31. Despite internally acknowledging systemic issues surrounding cancelling 

customers’ ability to reach its retention department, Vonage continued to require these telephone 

calls as a precondition of cancellation. Indeed, after informing one customer that “the voice 

team is having system issues and that’s why [sic] is so hard to reach them,” Vonage’s customer 

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service representative stated: “All I can do for you now is to provide you their phone number to 

keep trying.” 

32. Third, the live agent cancellation requirement has been more problematic still for 

the majority of Vonage’s residential consumers and many of its small business consumers, 

whose plans are billed at less than $60/month. Starting in September 2020, those “micro” 

account consumers have been restricted to chat support only and cannot contact Vonage by 

phone for any reason. For these customers, the path to submit a cancellation request has been 

even more circuitous. They have first been required to request cancellation via online chat and 

wait to be connected with a live chat agent. According to one Vonage manager, the cancellation 

process has stalled for some “micro” customers at this first step: when customers attempt to 

cancel their accounts via chat, “they are stuck in an endless cycle where their chat never gets 

picked up. This has happened multiple times.” Next, if the chat has gotten picked up and they 

are connected with a live chat agent, they then have had to wait for the live chat agent to call 

them and transfer them to a different “retention” agent or schedule a call-back on their behalf 

with the retention department. 

33. Fourth, even customers who find their way (or are successfully connected) to the 

cancellation call queue are often unable to request cancellation due to excessively long hold 

times. Vonage was also aware this was an issue: internal telephone records confirm that in 

numerous instances, the retention department experienced long average hold times. Indeed, its 

Senior Vice President of Customer Care was informed multiple times in 2016 that “[w]e are 

continuing to see complaints online about long wait times and not being able to cancel” and 

“there has been more feedback recently about holding to cancel accounts and/or never getting 

thru.” 

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34. Fifth, although cancelling customers purportedly can also request and wait for a 

callback from Vonage’s “retention department”—supposedly within 24 to 48 hours—numerous 

customers report never receiving the requested callback. Internal emails confirm that 

incomplete callbacks were a problem, with one Vonage supervisor admitting, “While we have 

gotten better, we still have a bit of a backlog with the cancellations queue.” Even when 

promised callbacks do occur, if Vonage agents are unable to reach the customer right away, they 

send an email advising the customer to call back, often resulting in an endless game of “phone 

tag” that results in more unwanted billing for the customer. 

35. Sixth, for any customers who, at long last, manage to reach the retention 

department, endure the hold time, speak to an agent, and request cancellation, they are subjected 

to aggressive sales pitches intended to prevent them from closing their accounts. Vonage’s 

retention agents are required to ask multiple “probing questions,” present at least two alternative 

offers, and overcome customer resistance to offers presented, and agents who fail to engage in 

these retention efforts are penalized and disciplined. Customers have complained about being 

“interrogated” and or subjected to a “hard sell” while attempting to cancel their accounts. 

36. Indeed, Vonage provides monetary rewards based on agents’ “save rate” – the 

rate at which agents are able to persuade cancelling customers to change their minds and remain 

with Vonage. As a result, retention agents are incentivized to do everything in their power to 

convince the customer not to cancel, including by escalating the cancellation to a supervisor 

instead of processing it. Vonage noted that this practice – which it calls “dodging the save rate” 

or “gaming the save rate” – was occurring in several instances when customers attempted to 

cancel. 

37. Finally, many customers cancelling their Vonage accounts wish to keep their 

phone number and transfer it to a new carrier, a process known as “porting,” but Vonage makes 

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Case 3:22-cv-06435 Document 1 Filed 11/03/22 Page 11 of 21 PageID: 11 

the already grueling process doubly onerous for business customers by requiring two separate 

cancellation procedures. After informing Vonage agents (often after the arduous procedure 

described above) that they wish to cancel their accounts and port out their numbers, these 

customers are advised that they cannot close their accounts until after the port is complete, at 

which point they must request cancellation of the account a second time. Failure to do so results 

in continued billing on these otherwise inactive accounts, and numerous Vonage customers have 

complained about being billed on accounts they believed were closed after all their phone 

numbers had been ported to new carriers. According to one Vonage manager, the primary 

purpose of this additional cancellation requirement, to occur after the business’s number had 

already been successfully ported to a new carrier, is to “attempt to retain [the account].” 

38. Vonage is aware that its aggressive sales pitch and repeated phone call 

requirements frustrated customers trying to cancel their accounts, particularly for consumers who 

have ported their numbers out. As one Vonage employee observed, most customers who are 

trying to cancel “have already ported [their numbers] out, they are frustrated with the experience 

– they do NOT want to have a Save conversation.” Nevertheless, for many years, Vonage 

continued to enforce the requirement that cancelling customers speak with a live retention agent 

and continues to deliver aggressive sales pitches to customers seeking to cancel over the 

telephone. Vonage’s difficult cancellation path is not disclosed to customers during the 

enrollment flow. 

Surprise, High Fees Employed as Deterrent to Cancellation 

39. In numerous instances, Vonage deters cancellation by requiring customers under 

contract to pay an “Early Termination Fee” (“ETF”). The existence and amount of the fee is not 

clearly and conspicuously disclosed to business and residential customers enrolling in Vonage’s 

11 
 

 

 

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Case 3:22-cv-06435 Document 1 Filed 11/03/22 Page 12 of 21 PageID: 12 

services, whether online or via phone. Residential consumers signing up online would see a 

screen such as the example below: 

If the consumer notices and clicks the “View Offer Terms” link, the consumer would next see the following 

screen: 

40. Eleven lines in, amongst other unbolded language, it reads, “Early termination 

may be subject to fees; max. ETF of $120 but Vonage prorates based on length of tenure.” 

41. For business consumers signing up online, information about ETF likewise 

appears only in small print in the enrollment flow. Consumers must first select a plan and click 

12 
 

 

\/ VONAGE Checkout 

Contact details 

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MONTHLY F EES 

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First bill 

Monthly bill 

$29.99 

$0.00 

-$9.00 

$20.99 

$20.99/mo 

Followlrig checkout you'll reeetve an email with details on how to 

accttSs your account portal and set up your account. Your service will 

fully activate and you wUI be charged on March 11, 2022. '1/onag,e 

Buslneu will bill on theflnt day of every bllUng cycle. Thia Vonage 

Buelnasa plan wlll automatlcally renew annually If you do not notify 

Von.age with your desire to terminate at least l)O days before the end 

of your Service Term commitment. Should you decide to terminate 

your service before the end of your Service Term Commitment (Merch 

10, 2023), you wlll be res ponalbla for any appHeable early termination 

,_s as outlined In the Terms of Servlee. 

Due today $20.99 

Case 3:22-cv-06435 Document 1 Filed 11/03/22 Page 13 of 21 PageID: 13 

on the option to “checkout” in order to arrive on a page requesting their address and payment 

information. 

42. On the above-depicted page, consumers must find small print disclosures about 

early termination, which in any case do not specify the amount of the fees, and instead refer only 

vaguely to the “Terms of Service.” For those consumers who then seek out the “Terms of 

Service” document, information about the amount of the ETF is only presented on page 8 of 25. 

43. Vonage similarly hides the ETF information for consumers signing up for 

services over the phone. Specifically, Vonage training materials state that information about the 

existence of an ETF “should not be proactively offered, but should be mentioned reactively” 

only if consumers specifically ask what happens if they cancel within the contract term. 

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44. Unsurprisingly, given the above-described concealment, numerous customers 

calling to cancel their accounts are surprised to discover Vonage’s ETF fees, complaining that 

they never saw the ETF policy or that the policy was not brought to their attention at the point of 

sale. 

45. In addition, business customers in one-year agreements who wish to cancel their 

accounts must pay the entire cost remaining on their contracts. Similarly, for business 

customers in two-year agreements, the ETF amounts to the entire cost of their remaining contract 

for the first year and 75% of their remaining contract for the second year. These requirements 

are similarly buried in Vonage’s Terms of Service. Vonage’s ETF policy presents these 

business customers with two equally unappealing options: pay out the rest of the contract (or 

close to that amount) and receive no telephone services or pay out the rest of their contract and 

continue unwanted services. 

46. Being required to pay out the amount of the rest of their contract acts as an 

effective deterrent to cancellation. For example, one business customer calling Vonage to 

cancel the business’s account because it had not been able to use the service at all was told she 

would have to pay an ETF of $675.62 even though, as the retention agent admitted, “the process 

has been difficult up to this point.” The customer reluctantly agreed to “try one more time” with 

Vonage because the business could not afford to “pay almost $700” for an unanticipated fee. 

Another business customer called to cancel the business’s Vonage services on the date the 

contract was set to renew to prevent being re-charged. Unfortunately, the retention agent said 

the business was too late and should have canceled the services 60-days prior to his renewal date 

if it wanted to avoid auto-renewal and now would have to pay the equivalent of an entire year of 

service. 

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Vonage’s Cancellation Process Is an “Endless Loop,” Resulting in Multiple Unwanted 

Charges for Consumers 

47. Vonage is aware that consumers do not expect its cancellation process to be this 

difficult or restrictive. Over the years, Vonage received hundreds of complaints about its poor 

customer service, including from customers expressly wondering why they could enroll online 

but not cancel the same way. Indeed, in a 2016 analysis of customer website comments, one 

Vonage employee noted to his manager that “[t]he only thing that I saw consistently was a lack 

of ways to contact us via phone, and cancelling service online.” One dissatisfied customer 

emailed Vonage’s former CEO directly to complain, stating, “I can’t understand your policy of 

having to talk to someone to cancel an account . . . I can order online but can’t cancel online.” 

48. Additionally, in 2009, it signed an Assurance of Voluntary Compliance with 32 

states which, in part, describes Vonage’s difficult cancellation procedures and the fact that it 

charged consumers after cancellation, and requires Vonage to address these deficiencies. 

49. Customers have detailed their efforts to navigate Vonage’s tiresome cancellation 

procedures, with many characterizing it as an “endless loop”: 

• “I have been calling the number listed to cancel for more than an hour. I am put 

into an endless loop and can't get in touch with anyone to cancel our business 

account. I am filing a complaint with the BBB and cancelling my credit card.” 

• “You should just know that Vonage is being unethical in how it makes it so very 

difficult to simply cancel my service. I've been stuck in an endless phone menu 

loop and can't find any way to manage this myself inside my account. It is wrong 

and ridiculous.” 

• “How can I cancel my account or delay activation for 90 days. . . Your online 

support indicates I must call. But, when I call, I’m put in an endless loop. 

Please help.” 

• “It has been literally impossible to reach anybody at Vonage to cancel my 

account. I wait on hold to speak in a chat for 40 minutes, nobody answers. The 

phone system sends me around in loops indefinitely with no humans.” 

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Case 3:22-cv-06435 Document 1 Filed 11/03/22 Page 16 of 21 PageID: 16 

• “We can’t cancel our vonage account. Their system is in a loop. Press one 

to talk to a rep, then it says you can chat with a specialist or go back to previous 

menu. You can’t chat to cancel your service, you need to speak to someone. 

Can you help? They won’t answer any number I call.” 

• “I have been trying to cancel my account for weeks and can not get through on the 

phone and every time they say someone will call me back, no one ever does. The 

company is bankrupt and this is becoming a legal issue.” 

• “I received an email saying my account will be activated. Why can you activate it 

but I can’t CANCEL It???? I have been trying for 1 week. [...] CANCEL 

CANCEL CANCEL.” 

• “[O]h no, I already said like 10 times to CANCEL the order. . . [P]lease cancel 

this order! Vonage is driving me nuts over this – never again...” 

50. Other customers have complained about repeated unwanted charges due to 

Vonage’s restrictive, convoluted, and time-consuming cancellation procedures: 

• “I have been trying to cancel this service for months now and every single time I 

call customer service an agent hangs up. I don’t want this service [...] acct is 

suspended but been charging me for over 4 months and the amount keeps 

increasing. [T]his is fraud and robbery.” 

• “I have been calling for over a week, multiple times a day. I push zero for an 

operator and it tells me to please hold while they connect me to someone and then 

the call is hung up. EVERY SINGLE TIME!! I’ve sent several emails stating 

what’s happening and to just cancel the service but they refuse to do it. I am 

continuing to get billed for something I’m no longer using and can’t cancel 

because they make sure you can't get through so they can continue to bill you.” 

• Consumer called Vonage multiple times over the course of nine months to cancel 

their account, but every time they called, “after 15-20 mins on hold, the call 

drops. I wait a few weeks and try again, repeat. They keep charging your card 

and give you no other way to cancel the account.” 

• Consumer “still being charged for Vonage after 10+ times trying to cancel,” 

complaining: “this is clearly a scam [...] it should not be this hard.” 

51. Yet other customers indicate they were duped by free trial offers because they 

were unable to reach a retention agent and cancel their accounts on time, resulting in unwanted 

charges. One business customer signed up for a free trial, which it attempted to cancel within the 

specified time period only to be informed that that Vonage’s system was down and the 

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cancellation could not be processed. Vonage promised the customer a call-back, but no call- back 

was received, and the customer’s account was subsequently charged. The customer had to call 

again to process the cancellation, complaining that, “frankly this is the MOST time consuming 

cancellation I have ever encountered. They are giving me the run around so they can keep billing 

me.” Another business customer enrolled in Vonage’s free trial called it “a scam with no way to 

close the account.” 

Vonage Charges Customers After Cancellation 

52. Additionally, in numerous instances when customers do manage to navigate 

Vonage’s convoluted process and complete the required cancellation procedures, Vonage 

continues to bill them for recurring service fees anyway. And if customers have provided 

Vonage with payment information, Vonage automatically charges the additional fees to their 

credit cards or bank accounts. Many customers report having to close down their payment 

accounts in order to stop Vonage’s unauthorized charges. 

53. Vonage is aware that the practice of charging after cancellation is ongoing and 

widespread, as evidenced by the fact that it has a specific refund policy for agents to use when 

“customer states the service was disconnected but billing continues.” Vonage has a similarly 

specific policy for overbilling that occurs due to long hold times on the telephone. Despite these 

company policies, customers often receive only partial refunds of the overbilled amounts, and 

many customers receive no refunds of the overbilled amounts at all. 

54. At least thousands of consumers, including consumers who enrolled in Vonage’s 

services online, have been substantially harmed by Vonage charging them between tens and 

thousands of additional dollars without authorization. Customers are also substantially harmed 

when they are required to expend significant time and effort requesting and waiting for refunds. 

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55. The harm from unwanted recurring charges is not reasonably avoidable, as 

customers do not expect that they will continue to be charged even if they cancel. Finally, there 

is no countervailing benefit to consumers or competition from this conduct. 

56. Based on the facts and violations of law alleged in this Complaint, Plaintiff has 

reason to believe that Defendants are violating or are about to violate laws enforced by the FTC. 

VIOLATIONS OF THE FTC ACT 

57. Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), prohibits “unfair or deceptive acts 

or practices in or affecting commerce.” 

58. Acts or practices are unfair under Section 5 of the FTC Act if they cause or are 

likely to cause substantial injury to consumers that consumers cannot reasonably avoid 

themselves and that is not outweighed by countervailing benefits to consumers or competition. 

15 U.S.C. § 45(n). 

Count I 

Unfairly Charging Consumers Without Consent 

59. In numerous instances, as described in Paragraphs 13 to 56 above, Defendants 

have charged consumers without their express informed consent. 

60. Defendants’ actions cause or are likely to cause substantial injury to consumers 

that consumers cannot reasonably avoid themselves and that is not outweighed by countervailing 

benefits to consumers or competition. 

61. Therefore, Defendants’ acts or practices as set forth in Paragraph 59 constitute 

unfair acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45(a), (n). 

VIOLATIONS OF THE RESTORE ONLINE SHOPPERS’ CONFIDENCE ACT 

62. In 2010, Congress passed the Restore Online Shoppers’ Confidence Act, 15 

U.S.C. §§ 8401 et seq., which became effective on December 29, 2010. In passing ROSCA, 

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Congress declared that “[c]onsumer confidence is essential to the growth of online commerce. 

To continue its development as a marketplace, the Internet must provide consumers with clear, 

accurate information and give sellers an opportunity to fairly compete with one another for 

consumers’ business.” Section 2 of ROSCA, 15 U.S.C. § 8401. 

63. Section 4 of ROSCA, 15 U.S.C. § 8403, generally prohibits charging consumers 

for goods or services sold in transactions effected on the Internet through a negative option 

feature, as that term is defined in the Commission’s Telemarketing Sales Rule (“TSR”), 16 

C.F.R. § 310.2(w), unless the seller, among other things, provides text that clearly and 

conspicuously discloses all material terms of the transaction before obtaining the consumer’s 

billing information, obtains the consumer’s express informed consent for the charges, and 

provides simple mechanisms for a consumer to stop recurring charges. See 15 U.S.C. § 8403. 

64. The TSR defines a negative option feature as a provision in an offer or agreement 

to sell or provide any goods or services “under which the customer’s silence or failure to take an 

affirmative action to reject goods or services or to cancel the agreement is interpreted by the 

seller as acceptance of the offer.” 16 C.F.R. § 310.2(u). 

65. As described in Paragraphs 2 to 56 above, Defendants have advertised and sold 

communication services through a negative option feature as defined by the TSR. 16 C.F.R. § 

310.2(u). 

66. Pursuant to Section 5 of ROSCA, 15 U.S.C. § 8404, a violation of ROSCA is a 

violation of a rule promulgated under Section 18 of the FTC Act, 15 U.S.C. § 57a. 

Count II 

Failure to Provide Required Disclosures 

67. In numerous instances, in connection with charging consumers for goods or 

services sold in transactions effected on the Internet through a negative option feature, as 

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described in Paragraphs 13 to 51 above, Defendants have failed to clearly and conspicuously 

disclose before obtaining consumers’ billing information all material transaction terms, including 

the following terms of cancellation: 

a. The method of cancellation; and 

b. That consumers who cancel their accounts while in a contract will be 

required to pay significant Early Termination Fees. 

68. Defendants’ acts or practices, as described in Paragraph 67 above, violate Section 

4 of ROSCA, 15 U.S.C. § 8403. 

Count III 

Failure to Obtain Express Informed Consent Before Charges 

69. In numerous instances, in connection with charging consumers for goods or 

services sold in transactions effected on the Internet through a negative option feature, as 

described in Paragraphs 13 to 56 above, Defendants have failed to obtain a consumer’s express 

informed consent before charging the consumer’s credit card, debit card, bank account, or other 

financial account for products or services through such transaction. 

70. Defendants’ acts or practices, as described in Paragraph 69 above, violate Section 

4 of ROSCA, 15 U.S.C. § 8403. 

Count IV 

Failure to Provide Simple Mechanisms for Stopping Recurring Charges 

71. In numerous instances, in connection with charging consumers for goods or 

services sold in transactions effected on the Internet through a negative option feature, as 

described in Paragraphs 13 to 51 above, Defendants have failed to provide simple mechanisms for 

a consumer to stop recurring charges from being placed on the consumer’s credit card, debit card, 

bank account, or other financial account. 

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72. Defendants’ acts or practices, as described in Paragraph 71 above, violate Section 

4 of ROSCA, 15 U.S.C. § 8403. 

CONSUMER INJURY 

73. Consumers are suffering, have suffered, and will continue to suffer substantial 

injury as a result of Defendants’ violations of the FTC Act and ROSCA. Absent injunctive 

relief by this Court, Defendants are likely to continue to injure consumers and harm the public 

interest. 

PRAYER FOR RELIEF 

Wherefore, Plaintiff requests that the Court: 

A. Enter a permanent injunction to prevent future violations of the FTC Act and 

ROSCA by Defendants; 

B. Award monetary and other relief within the Court’s power to grant; and 

C. Award any additional relief as the Court determines to be just and proper. 

Dated: November 3, 2022 Respectfully submitted, 

/s/Gregory A. Ashe 

GREGORY A. ASHE 

STEPHANIE LIEBNER 

ANGEL E. REYES 

FEDERAL TRADE COMMISSION 

600 Pennsylvania Ave., NW 

Washington, DC 20580 

Telephone: (202) 326-3719 (Ashe) 

Telephone: (202)326-2908 (Liebner) 

Telephone: (202) 326-2872 (Reyes) 

Facsimile: (202) 326-3768 

Email: gashe@ftc.gov, sliebner@ftc.gov, areyes@ftc.gov 

Attorneys for Plaintiff 

FEDERAL TRADE COMMISSION 

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