Vonage has been ordered to pay $100 million in refunds to customers who encountered obstacles and fees when they tried to cancel their service, the Federal Trade Commission said Thursday.

As part of the proposed court order, the Holmdel-based telecommunications company agreed to stop using so-called "dark patterns," which are hurdles designed to delay or prevent customers from stopping recurring charges.

The settlement “should remind companies that they must make cancellation easy or face serious legal consequences,” said Samuel Levine, director of the FTC's Bureau of Consumer Protection.

Vonage provides internet-based telephone services, known as Voice over Internet Protocol, or VoIP, to consumers, who pay from $5 to $50 a month, and businesses, who can pay thousands of dollars a month.

The company was acquired in July by Sweden-based Ericsson for $6.2 billion. And it moved its headquarters from a freestanding building at 23 Main St. in Holmdel to Bell Works, the former Bell Labs facility in Holmdel that has been turned into an office complex for multiple businesses.

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In a complaint filed in U.S. District Court in New Jersey, the FTC alleged that Vonage has made signing up for service as easy as clicking a button online, but it hasn't offered a simple way to cancel the service since at least 2015, at times running counter to the advice it gives its own business customers on effective telecommunications strategies.

Among the obstacles laid out in the FTC complaint:

• Vonage customers sign up through a "negative option" plan that begins with a free trial but requires them to take action to avoid being charged.

• Vonage doesn't allow customers to cancel through the main customer service telephone number that's prominent on its website, but instead need to call a special number that is obscured on the website and operates on a more restricted schedule.

• Vonage in early 2017 removed an online cancellation form for its business customers in a bid to reduce cancellations.

• Customers calling Vonage's cancellation line were repeatedly canceled and dropped. Internal emails between Vonage agents found agents discussing the issue with each other, noting customers are "sent in a circle when they want to downgrade or remove the service."

• Beginning in September 2020, customers paying less than $60 a month couldn't contact Vonage by phone. They instead needed to request cancellation through an online chat before being connected with a live agent.

• Customers in cancellation queue often gave up because of excessively long wait times.

• Customers who reached the retention department were subjected to aggressive sales pitches intended to prevent them from closing their accounts. Agents are required to ask multiple "probing questions," present at least two alternative offers and overcome customer resistance. Agents who didn't engage in those efforts are penalized and disciplined.

• In numerous instances, customers who canceled continued to be charged.

“Vonage agreed to resolve this matter and is compliant with the requirements set forth in the settlement," the company said in a statement. "The company felt it was in the best interests of our customers, partners and employees to come to a settlement, so we can focus on creating technology solutions that help people and businesses communicate, connect and engage from anywhere. Vonage has a strong ethics and compliance culture built on integrity, and believes in operating in an open, honest and transparent manner."

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In addition to the $100 million paid to the FTC, Vonage in the court order agreed to stop unauthorized charges; add a simplified cancelation process that is similar to the enrollment process; stop using "dark patterns" to frustrate customers; and inform customers about steps they need to take to avoid being charged.

Michael L. Diamond is a business reporter who has been writing about the New Jersey economy and health care industry for more than 20 years. He can be reached at mdiamond@gannettnj.com.

This article originally appeared on Asbury Park Press: Vonage paying $100M in refunds to customers who struggled to cancel