Vonage to Pony Up Millions to States

Vonage Holdings Corp. (VG), no stranger to litigation, has agreed to settle with 32 states over alleged unfair business practices.

The over-the-top VoIP provider will distribute $3 million among states including Arizona, Idaho, Kansas, Ohio and Wisconsin, and send refunds to affected customers. Wisconsin spurred the investigation two years ago.

Attorneys general said residents registered numerous complaints with them. In Idaho, customers said they had a hard time canceling their accounts when Vonage pressured them to keep their service. In Texas, consumers said Vonage didn’t make it clear they needed broadband to use the company’s phone service. Then, when subscribers did cancel, they said Vonage still made them pay termination and other fees. Finally, Vonage has said it will change, and clarify, its “free” offers, money-back guarantees and trial periods.

Vonage said there was no finding of wrongdoing or violation and that it will make adjustments – which it didn’t specify – to its business practices.

After going public in 2006, Vonage found itself the target of numerous lawsuits from rivals, investors and patent holders. It lost most of those cases and ponied up millions of dollars in settlement money.