$100M FTC Enforcement Action Against Internet Phone Service Provider for Dark Patterns
On November 3, 2022, the Federal Trade Commission announced a proposed order to settle an action against an internet phone service provider, Vonage, that would require Vonage to pay $100 million in refunds to customers harmed by its practices, which the FTC alleged included “dark patterns” that made it difficult for customers to cancel their service. The order also would require Vonage to not use dark patterns and provide a simple and transparent way for customers to cancel their service.
In the action in the U.S. District Court for the District of New Jersey, the FTC alleged Vonage provided numerous easy ways for consumers to sign up for its service but made its cancellation process significantly more difficult. In particular, the FTC alleged that Vonage’s harmful practices included reducing the methods by which the service could be canceled to a single method, making the method of cancellation difficult, charging unexpected early termination fees, and continuing to charge customers after they canceled or only issuing partial refunds for unauthorized charges.
Pursuant to the proposed order, Vonage has agreed to not charge customers unauthorized fees, simplify the cancellation process so it is easy to find and use and is available through the same method the customer used to sign up for the service, not use dark patterns to interfere with customers’ efforts to cancel the service, and be transparent with customers regarding Vonage’s subscription plans and how to cancel before a free trial period ends.
The Director of the FTC’s Bureau of Consumer Protection, Samuel Levine, stated, “today the FTC delivers on our commitment to protect consumers from illegal dark pattern tactics by companies that prevent consumers from cancelling their services. This record-breaking settlement should remind companies that they must make cancellation easy or face serious legal consequences.”