In late November, the Pennsylvania AG’s office announced a settlement with Grubhub. In its action, the AG alleged among other claims that Grubhub’s platform did not clearly disclose to consumers that they were sometimes charged higher prices for items ordered through the platform compared to ordering from the restaurant directly. Attorney General Shapiro settled for
In a case that will likely resonate with many readers, the FTC’s recent settlement with Vonage describes in excruciating detail the obstacles and costs that Vonage allegedly imposed on consumers when they tried to cancel their phone service. In many ways, it’s a typical FTC case involving deception, unauthorized charges, and misuse of a “negative option” that makes it simple to sign up and almost impossible to cancel. However, the FTC’s characterization of the practices as “dark patterns,” coupled with some other features, make this case stand out. Indeed, any company with a “customer retention strategy” (which is apparently what this was) would be wise to pay attention.
The FTC’s Complaint
According to the FTC’s complaint, Vonage provides internet based phone service (known as Voice Over Internet Protocol or VOIP) to consumers and small businesses. Monthly charges range from $5-50 for individual customers and can be as high as thousands of dollars for small businesses. In many cases, Vonage signs up consumers using a negative option plan that requires them to cancel by certain date before being charged.
The complaint alleges that, between 2017 and 2022, Vonage provided several ways to sign up for its plans (including online and via toll free number) but made cancellation much more difficult through numerous hurdles. It also alleges that, in some cases, monthly fees continued after cancellation; consumers were charged (or threatened with) undisclosed early termination fees (ETFs); and Vonage provided only partial refunds or no refunds at all. The complaint says that this was all part of a “customer retention strategy” that Vonage pursued despite hundreds of consumer complaints, knowledge among employees, and an earlier settlement with 32 states over similar allegations.
According to the complaint, these practices violated the Restore Online Shoppers’ Confidence Act (ROSCA) (failure to disclose material terms, obtain informed consent before imposing charges, and provide a simple mechanism to stop recurring charges) and Section 5 (charging consumers without their express informed consent).
Continue Reading The FTC’s case against Vonage – Customer Service Nightmare as “Dark Patterns”
Earlier this week, we posted that a plaintiff filed a proposed class action against the NFL over its automatic renewal practices. The complaint alleges that the NFL used “dark patterns” to enroll consumers in its NFL+ subscription without consent and that it then made it difficult for them to cancel. Although we don’t…
No, we’re not talking about sinister sewing guides, but rather practices or formats that may manipulate or mislead consumers into taking actions they would not otherwise take.
In Part One of this discussion, we provided background on the concept of dark patterns and analyzed some recent examples from State AG enforcement. We concluded that, in alleging dark patterns, State AGs are building primarily on existing precedent governing deception and unfairness but also are trying to push the envelope. Whereas earlier precedent mostly…
State and federal regulators have definitely put a new emphasis on combatting so-called “dark patterns” – a term attributed in 2010 to user-experience expert Harry Brignull, who runs the website darkpatterns.org. Consider some of the actions of 2021: In April, the FTC hosted a workshop dedicated to dark patterns. In July, Colorado passed the Colorado Privacy Act that specifically defines and prohibits the use of dark patterns. In October, the FTC issued a policy statement warning against the use of dark patterns in subscription services. And just last week, a bipartisan group of four states sued Google alleging in part violations of state law for Google’s use of dark patterns in obtaining consumers’ consent to collect geolocation information. But other than a catchy name, is there really anything new about the types of conduct that state and federal officials are calling illegal? This two-part blogpost will take a closer look at that question.
What are “Dark Patterns?”
There are a number of definitions of “dark patterns” that are bandied about. Darkpatterns.org calls them, “tricks used in websites and apps that make you do things that you didn’t mean to, like buying or signing up for something.” In the Colorado Privacy Act, dark patterns are defined as, “a user interface designed or manipulated with the substantial effect of subverting or impairing user autonomy, decision-making, or choice.” And in the recent Google lawsuits, each State defined dark patterns as, “deceptive design choices that take advantage of behavioral tendencies to manipulate users to make choices for the designer’s benefit and to the user’s detriment.”…
Continue Reading Dark Patterns: A New Legal Standard or Just a Catchy Name? (Part One)