Vonage scorned in Charlotte, rated "B-" by Better Business Bureau

Down in Charlotte, Vonage has riled up the local news station, but the Better Business Bureau has independently rated the company a "B-." So what does this mean, exactly?

One of the local citizens in Charlotte attempted to cancel her Vonage service when it started dropping phone calls. The dispute turned into an argument, with the citizen cancelling her debit card to stop payment, and Vonage demanding $170 in cancellation fees or it would report her to the credit bureaus.

After intervention by the local TV station, Vonage agreed to allow the customer out of her contract if she returned the CPE gear.

Action 9 news said Vonage had "almost 10,000 complaints," but the station neglected to put the number into context. A visit to the Better Business Bureau's website reveals a more nuanced picture.

Over the last three years, the BBB has logged 9,594 complaints. Over the last 12 months, 3,231 have been closed. Out of the 9,594 resolved, 9,102 were resolved by the company, 490 were "administratively closed" - BBB's way of saying that the complaint couldn't be worked out using standard methods of voluntary dispute resolution - and 2 were unpursuable (i.e. complaining party has likely moved).

For this effort, Vonage is rated a "B-" and BBB notes that one of the reasons for the rating is "Length of time business has taken to resolve complaint(s)."

Taking a more global view, an average of around 3,200 people per year file complaints with the BBB about Vonage. With a rolling customer base of more than 2.6 million users (September 30, 2008 numbers), this equates to around 1.4 percent of the customer base per year being mad enough to file a complaint with the BBB.

Perhaps a better measure of how good the company is doing by its customers is churn rate. At last report, it was more than 3 percent per month, with an updated churn number expected on Thursday morning when the company releases its Q4 and year-end 2008 results.

For more:
- Action 9 news in Charlotte NC report [1].
- Better Business Bureau rating of Vonage. Page [2].