Vonage Bows Down Before FTC Directive; To Pay A $100M Penalty

Communications firm Vonage agreed to pay $100 million to resolve a Federal Trade Commission (FTC) lawsuit, Reuters reported.
FTC prosecuted Vonage for failing to provide a simple method for customers to cancel their telephone services and imposed "junk fees," the agency said.
Vonage, which Ericsson ERIC acquired earlier this year in a $6.2 billion deal, had created significant obstacles to deter and prevent customers from stopping recurring charges, the FTC alleged and proposed settlement in U.S. District Court in New Jersey.
The $100 million will be turned over to the FTC to provide consumer refunds.
Vonage also agreed to offer clear disclosures about recurring charges and a simple method to stop recurring payments or avoid increased costs.
"Vonage made it easy to sign up but much harder to cancel, sometimes trapping consumers in an endless loop of call transfers," FTC Chair Lina Khan said on Twitter.
"In some cases, Vonage kept charging customers or hit them with hidden early termination fees."
Price Action: ERIC shares traded higher by 1.31% at $5.43 in the premarket on the last check Friday.