Who could forget that chilling warning? California hotel: “You can check in anytime. But you can never leave.” Those who have tried to cancel service from Internet phone provider Vonage may feel the same way. In the $100 million settlement, the FTC alleged that Vonage thwarted efforts by consumers and small businesses to cancel its service. This is the latest action by the Federal Trade Commission in its ongoing crackdown on illegal obstacles, detours, roadblocks and shenanigans commonly referred to as “dark patterns.”
Vonage charges its customers by charging their credit or debit cards or withdrawing funds directly from their bank accounts. Consumers typically pay $5 to $50 per month, while business accounts can total thousands of dollars. According to the FTC, Vonage took customers’ money since at least 2015 but failed to provide an easy way for people who wanted to cancel their orders.
You’ll need to read the complaint for details, but here are examples of conduct the FTC challenges as illegal.
Vonage makes it easy to sign up for its service but blocks all but one cancellation method. Vonage offers several ways for people to sign up, including through its website or by calling a toll-free number. But starting in 2017, Vonage gave people one and only one way to cancel: by speaking with a live “retention agent” over the phone. When people asked to cancel via email or online chat, the FTC said Vonage didn’t give in, telling customers the company “will not accept cancellations via email, fax, text message, or other electronic means.”
Vonage has created obstacles to achieving this path to cancellation. According to the FTC, Vonage compounded the problem by making it difficult for customers to contact these “retained agents.” First, good luck finding the cancellation number on the company’s website. What’s more, if people called Vonage’s general customer service number trying to cancel, the company didn’t consistently transfer them to the correct line. Instead, people find themselves trapped in a dizzying, frustrating do-si-do. The FTC also said Vonage reduced the hours the cancellation hotline was available, resulting in long waits and annoying disconnections.The complaint provides some quotes Vonage received from its customers – For example, “It was virtually impossible to contact anyone at Vonage to cancel my account. I was on hold in chat for 40 minutes with no one answering. The phone system left me in an endless loop with no one available,” according to one quoted in the complaint. In an internal email, a Vonage employee said that “customers are being pushed around when they want to downgrade or remove service.”
Vonage charges people an early termination fee but doesn’t explicitly disclose it. For customers who were finally able to get to the cancellation queue, the surprises weren’t over yet. The FTC said that in many cases they were told they would have to pay unexpected early termination fees, sometimes totaling hundreds of dollars, that were not clearly explained when they signed with Vonage.
Vonage continued to charge people after they canceled their reservations. Complaints allege that after going through Vonage’s daunting cancellation maze, some people continued to be charged even after saying “I quit!” In the strongest possible terms. When they contacted Vonage to complain about unauthorized post-cancellation charges, the FTC said many customers received only partial refunds.
The complaint alleges that Vonage’s conduct violated the FTC Act and ROSCA – Restoring Online Shopper Confidence Act. To resolve the case, Vonage will pay a $100 million refund. Additionally, under the proposed stipulated order, companies must implement a simple cancellation process that is easy to find, easy to use and available through a variety of channels. Vonage must also clearly explain the terms of its negative options program up front, including an understandable explanation of what people need to do to avoid these fees, the total cost they will have to pay if they don’t take these steps, and when they must take them Timetable for action. The proposed order further requires companies to stop charging people without their explicit, informed consent.
With apologies to the Eagles, here are takeaway tips other companies should consider to ensure they don’t run their own California hotel.
“Relax, said the Watcher. We are programmed to receive.” Compare the resources you use to sign up new customers with the efforts you put into streamlining the cancellation process. If your company is “programmed to receive” and cancellation becomes a nightmare, you may find yourself in legal hot water. Make sure your “retention” efforts don’t create “tension.”
“The last thing I remember is running towards the door. I had to find my way back to where I came from.” Is there a better description of the frustration consumers experience when companies subject them to unfair or deceptive dark patterns?Federal Trade Commission Bringing dark patterns into light Report describes many of the tactics that raised concerns among law enforcement and highlighted the FTC’s‘We have a long-standing and ongoing commitment to combating illegal behavior.
“What a pleasant surprise. Bring your alibi.” Unexpected charges are never a “surprise,” and there is no “excuse” for a company’s failure to clearly explain fees and costs upfront and obtain the consumer’s express consent before billing.
