MEMPHIS (WMC TV) - It pays when your customer service has a great bedside manner.
An Internet-based phone service has discovered it now has to pay for not having much of a bedside manner at all.
Vonage (www.vonage.com) has agreed to pay 32 states, including Tennessee and Arkansas, a total of $3 million plus restitution and "make significant changes to its marketing practices, honor consumer cancellation requests, and provide refunds to eligible consumers," according to Tennessee Attorney General Bob Cooper.
Cooper said Vonage's sales practices often confused Tennessee consumers about equipment, services and sales contracts. He also said Vonage paid its customer service agents "incentives...for retaining customers when consumers called to cancel."
Minnie Todd-Lee of Bethel Grove near Orange Mound in South Memphis is one of the consumers whose case was investigated by the attorney general. She told Action News 5 she signed up online with Vonage for phone service at $9.95 a month.
A month later, she said Vonage billed her electronically -- for $29 a month.
She said a Vonage customer service agent refused her request to either cancel the service or knock it back to the $9.95 rate. She said he told her she must remain locked into the $29 rate for another month.
"And then he got so upset with me, he told me not only was he going to take the $29 out, he was going to take $41 for the equipment they were going to send to me," Todd-Lee said.
Vonage cancelled the contract and refunded her money after she filed a formal complaint with the Tennessee Regulatory Authority, who forwarded her complaint to the attorney general.
Tennessee's take is $45,000 in the agreement, "...which will provide restitution to eligible Tennesseans," said Cooper.
"The agreement also addresses a number of other marketing practices," he said. "Specifically, Vonage will be revising its disclosures regarding the offer of 'free' services, money-back guarantees and trial periods.
"Vonage has also agreed to make refunds to eligible consumers who file complaints regarding unauthorized charges from January 2004 to March 9, 2010."
Vonage spokesperson Charles Sahner e-mailed the following statement to Action News 5:
“Vonage is pleased to have reached a settlement with various state attorneys general of their investigation into certain of the company’s business practices. Vonage fully cooperated in the investigation and, as part of the settlement, has agreed to maintain or implement enhancements to its business practices that will improve customer experience and satisfaction, many of which the company implemented prior to completion of the settlement.
"Under the settlement, Vonage also will pay $3 million to the states participating in the settlement to cover legal and investigative fees incurred. The company also agreed to provide refunds to customers under certain circumstances. The charges related to the payment to the states and the refunds were previously reflected in the Company's financial results. No finding of any violation or wrongdoing was made by the states in connection with the investigation or settlement.”
Tennessee consumers wishing to file complaints can contact the Tennessee Division of Consumer Affairs at 1-800-342-8385 or 615-741-4737 or www.state.tn.us/consumer.
Arkansas consumers can contact the Arkansas Attorney General's office at 1-800-482-8982 or http://www.ag.state.ar.us/consumers.html.
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