Wednesday, November 25, 2009

Ohio ranks 7th in bankruptcy filings up 34 percent over last fiscal year, court records show

November 25, 9:10 PMColumbus Government ExaminerJohn Michael Spinelli
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Bankruptcy Filings per 1,000 Population, State and Territories, Fiscal 2009
http://www.calculatedriskblog.com

COLUMBUS, Ohio -- Figures released Wednesday by the U.S. Courts on the number of bankruptcy filings over the last federal fiscal year show Ohio ranked 7th highest, a sign that more trouble and heartache are headed toward the Buckeye State, where unemployment has hit 10.5 percent, manufacturing jobs continue to go poof every month and where the social safety net once backstopped by steadfast state dollars is now frayed from declining state revenues.

Total bankruptcy cases filed in federal courts for fiscal year 2009 -- for October 1, 2008 to September 30, 2009 -- totaled 1,402,816, up 34.5 percent over the 1,042,993 filings reported for the 12-month period ending September 30, 2008, according to statistics released today by the Administrative Office of the U.S. Courts.

In FY 2009, filings rose for all bankruptcy Chapters:

  • Chapter 7 filings in FY 2009 totaled 989,227, up 45 percent from the 679,982 Chapter 7 filings in FY 2008.
  • Chapter 11 filings rose 68 percent, increasing from 8,799 in FY 2008 to 14,745 in FY 2009.
  • Chapter 13 filings rose 13 percent, from 353,828 in FY 2008 to 398,210 in FY 2009.
  • Chapter 12 is designed to meet the needs of financially distressed family farmers.

In FY 2009, Chapter 12 filings totaled 487, up 47 percent from the 332 Chapter 12 filings in FY 2008.

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Ohio's growing homeless population could be state's 7th largest city

November 25, 4:47 PMColumbus Government ExaminerJohn Michael Spinelli
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Thanksgiving family gathering (Photo/John Michael Spinelli)

COLUMBUS, Ohio -- With Thanksgiving day upon us, a day that celebrates the bounty of the harvest and the community's collective gratitude for it, there is a growing number of Ohioans who will not enjoy the happiness of having family and friends gathered together under a cozy roof to enjoy it all.

Sadly, if the current number of homeless people in Ohio lived in one place, it would represent Ohio's 7th largest city, sandwiched in between Dayton and Parma. .

As economic conditions in Ohio continue to deteriorate, evidenced by an unemployment rate of 10.5 percent, continuing problems with home foreclosures as poverty rises, the population ages and more people going hungry, the grab by some state legislators of $30 million from the state's Housing Trust Fund to partially fill a nearly $900 million budget hole is way out of bounds, according to the leader-in-chief of Ohio's leading homeless and low-income housing advocacy group, the Coalition on Homelessness and Housing in Ohio (COHHIO).

If you're homeless, you need all the help you can get, which is why Bill Faith, Executive Director of COHHIO, believes the no-bid contract of about $76,000 awarded to a Louisiana firm to keep track of them all is important, as it continues administration of a statewide Homeless Management Information System (HMIS) that will better direct help to these people.

Faith, in an email exchange with this Examiner, said the additional federal stimulus dollars flowing to Ohio for homelessness prevention warrants changes in the HMIS system to incorporate the organizations providing those services across the state into the existing system is a good thing. Bowman Systems, LLC, of Shreveport, Louisiana, designed the original system for the Ohio Department of Development (ODOD). The contract, already in progress, will be approved retroactively at the November 30th meeting of the Controlling Board.

COHHIO, which has provided a voice for the underrepresented for more than 30 years, has as its noble, humanitarian mission the ending homelessness and the promotion of affordable housing. While achieving its dual mission is still over the distant horizon, Faith said his group will continue to be involved in a range of housing assistance services in Ohio, including homeless prevention, emergency shelters, transitional housing and permanent affordable housing with linkages to supportive services. He said COHHIO assists hundreds of housing organizations and homeless service providers in Ohio through public policy advocacy, training and technical assistance, research and public education.

While state funds will flow to a non-Ohio company, Faith says local communities are required to have a Homeless MIS system in place in order to qualify for ongoing support for homelessness funding from HUD. ODOD administers the homeless and housing money for the state and it also applies for homeless funding from HUD for the smallest 80 counties in the state – therefore necessitating the need for an HMIS system for all of those counties. Last year HUD provided about $10 million for homeless programs in those 80 counties, Faith said, noting that Ohio's eight largest counties apply directly to HUD and must also comply with the HMIS requirement.

"We work closely on all of this stuff with ODOD and have done so for many years," said Faith, who clarified that even though Ohio has its own agency dedicated to jobs and family services, it has never administered any of funding for homeless or housing projects in the state. "I guess that is similar to the separation of responsibilities between HHS and HUD at the federal level," he surmised.

Faith estimated that "there is probably in the ballpark of 150,000 Ohioans who will be homeless at some point this year and no doubt the requests for services is growing in these tough times."

He said the stimulus money in the homeless arena is for homelessness prevention or emergency rent assistance to help people avoid eviction or to help housing costs in order to leave emergency shelters. Despite the passage of the stimulus package earlier in the year, Faith said the funding has just recently started to flow and is expected to last two to three years.

"I don’t know what happens if the funding stops flowing – I guess more people will be evicted and others will be stuck in shelters longer," he said of what happens when one-time funds for homelessness, like those for other uses, dries up.

Follow me on Twitter @ohionewsbureau. Read more stories on people, politics and government in Ohio here.

Saturday, November 21, 2009

Ohio Senators Brown, Voinovich split votes on historic health care reform bill

November 21, 10:30 PMColumbus Government ExaminerJohn Michael Spinelli

Ohio's Democratic Junior US Senator Sherrod Brown
(Photo/John Michael Spinelli)

COLUMBUS, Ohio -- Everyone agrees that history was made Saturday evening when the US Senate voted on the controversial health care reform bill, but for Ohio senators Sherrod Brown, a Democrat, and George Voinovich, a Republican, their votes came down to doing what hasn't been done since the days of Harry Truman or to saving future generations for having done so.

Reports from the AP said the spectator galleries were full and that applause broke out briefly when the vote was announced. Keeping with the heated tone of the debate over the months, published reports noted that Majority Leader Harry Reid, D-Nev., accused Republicans of trying to stifle a historic debate the nation needed.

"Imagine if, instead of debating whether to abolish slavery, instead of debating whether giving women and minorities the right to vote, those who disagreed had muted discussion and killed any vote," Reid said, according to the AP.

Likewise, the AP said Sen. Mitch McConnell of Kentucky, the Minority Leader, said the vote was anything but procedural, and casted it as a "referendum on the bill itself," which he said would "raise taxes, cut Medicare and create a 'massive and unsustainable debt.,'" themes that would be echoed by Sen. Voinovich.

In the 60-39 vote, Brown, the junior senator elected in 2006, said the vote to open debate on health reform brings the nation "one step closer to making insurance more affordable for millions of Americans."

For Voinovich, who did not vote, the proposed bill "cuts Medicare, raises taxes, increases premiums, hurts states and threatens the health choices that millions currently enjoy," according to a statement posted on his office Web site that added, "This is not reform, and it is not what the American people are asking for. That is why I cannot support Sen. Reid’s health care bill and will not support the vote on the motion to proceed to the bill."


Ohio's Republican Senior Sen.
George Voinovich (Photo/Voinovich
Senate Web site)

But for Brown, who has expressed confidence over the weeks that the bill would indeed include a public option for a government run health exchange that will provide competition to private health insurers, the bill was historic for many reasons. "Passing health insurance reform means that Americans won’t lose health coverage if they change or lose their jobs," he said in a statement on his office Web site. "It means an end to insurance industry practices that limit medical care or charge higher rates to women or individuals with pre-existing medical conditions. We’re one step closer to lowering costs for small businesses and middle class families,”

With the news this week that Ohio's unemployment rate rose to 10.5 percent, Voinovich, known as a deficit hawk but who voted for the tax cuts and war spending of the Bush Administration, said the new health care legislation should first do no harm to the economy. "Sen. Reid’s bill is full of budget gimmicks and will cost Americans $2.5 trillion over the next decade, ignoring the fact that we cannot even take care of our current obligations," he said. "The bill will also raise taxes on Americans by half a trillion dollars while cutting Medicare by nearly the same amount – hurting our nation’s seniors. And, CBO says this bill will increase federal health costs, not lower them like health care reform was supposed to achieve."

Brown sees matters differently. “When it comes to health care, the cost of inaction is too high. This bill will cut our nation’s deficit by $130 billion in the first ten years and will preserve Medicare. It will help keep the insurance industry honest and drive down premiums by injecting competition through a strong public option."

Brown hopes Republicans will choose to be part of the solution. "We have an opportunity to invest in the economic security of American households and the economic competitiveness of American businesses, all while lowering costs and reducing the deficit," Brown argues. "Americans deserve more affordable and dependable health insurance, and tonight’s vote permits us to move forward toward that goal.”

In addition to expressing concerns for the additional financial burdens he says the bill will bring to Americans, Voinovich noted another reason for opposing the bill. "Additionally, I cannot support Sen. Reid’s proposal because I believe any health reform bill must protect all human life from conception to natural death and am adamantly against allowing federal funding for abortions.”

Follow me on Twitter @ohionewsbureau. Read more stories on people, politics and government in Ohio here.

Wednesday, November 18, 2009

Senator Harris offers Ohio Gov. Strickland 28 ideas for short, long term budget fixes


COLUMBUS, Ohio -- In a media release distributed shortly after 7 pm Wednesday, after another frustrating day of closed door meetings on how to fill an immediate hole in Ohio's budget while also devising long term solutions both parties can agree on, Senate President Bill Harris (R-Ashland) said he is willing to meet Gov. Ted Strickland "more than half way if he will pledge to put politics aside and work with us on the bigger budgetary problems that we all know are ahead of us."

But what's reasonable to Harris was characterized as not being responsible by a spokesman for Strickland, who told William Hershey of the Dayton Daily News that the package of GOP proposals "is not a responsible way to address the serious budget challenges facing the state and Ohio’s schools.” Amanda Wurst, Strickland’s spokeswoman said, "…the governor believes that the Senate has the responsibility to either put forward a realistic and responsible proposal or adopt the tax freeze, even if that means working through the weekend.”

At issue is how to fill a budget hole of more than $900 million over the remaining months of Ohio's two-year fisal year that ends June 31st. Dollar Information sent along with tonight's announcement pegs the shortfall at $911.5 million. To help plug that gap, Harris proposes to allow one-third of the scheduled income tax reduction, or $284 million, to go into effect rather than the full freeze. He also wants to use $200 million in casino licensing fees, made possible by Ohio voters approving the construction of four casinos, one each in Toledo, Cincinnati, Cleveland and Columbus. Another $30 million would come from sentencing reform savings, while amounts of $10 and $15 million would come from other reforms.

The statement from Harris said Senate Republicans, who control the upper chamber 21-12 over Democrats, continued to work to address the shortfall of about $851 million in state education funding.

He said he and his Republican caucus offered the Governor and his fellow Democrats a "reasonable compromise that addresses the shortfall in state education funding, ensures Ohio taxpayers will see approximately $280 million of the tax reduction they were promised over tax years 2009 and 2010, and takes important steps toward long-term cost savings for the state that will help in balancing the next state budget when federal stimulus and other one-time funding will not be available."

During the budget debate this spring, Republicans warned Strickland not to rely on one-time federal stimulus funds to prop up the budget because it would only lead to even harsher cuts in the next two-year budget cycle when manna from Washington dries up, and lawmakers would be faced with either cutting government down further than Strickland has already done or increasing revenues, which, as Harris emphasized again, goes against the grain of their economic policies.

“It is no secret that Senate Republicans have serious concerns about going back on the income tax cuts Ohioans are already enjoying today," Harris said, adding that he and his political cohorts "believe that allowing Ohioans to keep more of their hard-earned money during a recession should continue to be a priority for leaders in state government."

To demonstrate the size of the olive branch they have offered Strickland, Harris reiterated that he has committed to "passing sentencing reform and construction reform," proposals he said Strickland has already endorsed.

Harris, underscoring the need to find common ground in order to "address today's shortfall, but in saving state and local governments hundreds of millions of dollars in the long run," said he has delivered on the challenge made by Strickland that if Republicans didn't like what he was offering, they should present their own plan.

“The Governor told us to present our ideas. We have done that," Harris said, referring to the 28 amendments he proposes to put forward, that may or may not gain any votes from Senate Democrats. The Minority Caucus said if Harris wanted to gain their 12 votes and provide five of his own to reach the magic number of 17 to approve legislation, he would have to reach out to them. Harris countered by saying that his caucus had a Plan B that does not need a single Democrat to vote for it to pass it.

Harris encouraged Strickland to "give serious consideration to what we have put forth and rather than dismissing it out of hand, offer his constructive ideas so we can reach a truly bipartisan agreement. We owe it to the people of Ohio to work together and resolve our differences in a fiscally responsible manner.”

A draft synopsis of proposed amendments to HB 318 – the bill the Ohio House passed to fix the budget hole -- follow:

  1. Allow one-third of the scheduled income tax reduction to go into effect rather than freezing the full reduction
  2. Create a trigger mechanism by which an increased portion of or the full scheduled income tax rate reduction would occur if the Governor moves forward on VLTs, or if excess casino revenues are generated within the biennium and could be used to offset GRF
  3. Restores $25 million in FY 10 and $35 million in FY 11 for chartered, nonpublic schools which were disproportionately cut in the budget process
  4. Transfer the casino licensure fees, approved by voters as ‘state issue 3,’ into the GRF to offset current regional job program expenditures
  5. Grant waivers for school districts regarding unfunded mandates for all-day kindergarten and class size reductions
  6. Allow school districts to privatize transportation services if they choose to do so
  7. Provide flexibility in state report cards for school districts that failed to meet adequate yearly progress (AYP) in certain sub groups
  8. Allow broader use of joint purchasing by education service centers and school purchasing consortia
  9. Inclusion of the SB190 ROTC high school credit provisions
  10. Inclusion of Ohio Construction Reform Panel recommendations as drafted by DAS (draft LSC 1411-3)
  11. Requirement that DAS implement paperwork reduction/cost savings strategies
  12. Inclusion of comprehensive sentencing reforms
  13. Establishment of an oil & gas drilling pilot program on state-owned land at Salt Fork
  14. Removal of pay cut language as it is now contained in SB20
  15. Create of a privatization commission to study state functions that could be privatized
  16. Specify that future collective bargaining contracts let by the state will coincide with the state’s biennial budget timeframe
  17. Require that three state agencies (DNR, EDU, and ODOT) undergo performance audits
  18. Study a state government restructuring plan similar to those proposed in SB52 and HB25
  19. Study potential cost savings and economic benefits to Ohio employers and injured workers by allowing private insurance companies to compete with the BWC
  20. Require the Auditor of State’s Office to determine if BWC has adequate reserves compared to industry standards and to recommend rebates if an over-reserve is determined to exist
  21. Study cost savings which may be achieved if the state were to go to a four-day workweek
  22. Transfers functions of the School Employee Health Care Board to DAS and deletes GRF appropriation in EDU
  23. Transfer $15 million per FY from the liquor profits fund into the GRF
  24. Transfer $15 million per FY from the Housing Trust Fund into the GRF
  25. Transfer $1 million per fiscal year in total from three Public Safety education funds (83G0, 83N0, and 8440)
  26. Specify that the insurance settlement funds for the Lake Hope State Park lodge be used for the purpose of fixing that site
  27. Use half of the current scrap tire fee to provide funding to the state’s Soil & Water districts
  28. Ensures correct appropriation authority for the Department of Mental Health’s 408 line item.here.

Follow me on Twitter @ohionewsbureau. Read more stories on people, politics and government in Ohio here.



As Ohioans get fatter, their wallets will get thinner, national health study says

November 18, 1:43 PMColumbus Government ExaminerJohn Michael Spinelli
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Silhouettes and waist circumferences representing
normal, overweight, and obese (Photo/Wikipedia)


Related Information

COLUMBUS, Ohio -- If forecasts from a new national health study are correct, that more than 50 percent of adult Ohioans will be obese by 2018, it follows that all Buckeye wallets will become thinner as the costs for obesity-attributable health care services will be passed on in the form of higher insurance premiums.

A study commissioned by the United Health Foundation (UHF), Partnership for Prevention and American Public Health Association forecasts that the annual medical costs associated with obesity could rise by more than $1,800 per person within the next decade as Ohio's obesity rate tops 50 percent.

According to Kenneth Thorpe of Emory University, the rise of health insurance premiums could rise from $433 in 2008 to $1,877 a year in 2018, even for right-sized adults.

The ranking of states according to health profiles by UHF show Ohio moved from 34 last year to 33 this year. Vermont was first; Mississippi was last.

Among Ohio's list of strengths was a low rate of uninsured population at 11.6 percent, a high immunization coverage with 82.9 percent of children ages 19 to 35 months receiving complete immunizations and low geographic disparity within the state at 9.2 percent. Ohio ranks higher for health determinants than for health outcomes, study details noted, indicating that overall healthiness should improve over time.

What are Ohio's health challenges? Among them are a high prevalence of obesity at 29.2 percent of the population, high levels of air pollution at 13.4 micrograms of fine particulate per cubic meter, low public health funding at $39 per person, a high rate of preventable hospitalizations at 84.2 discharges per 1,000 Medicare enrollees, many poor mental health days per month at 3.9 days in the previous 30 days and a high rate of cancer deaths at 209.1 deaths per 100,000 population.

What's changed over time? Included are the prevalence of smoking decreased from 23.1 percent to 20.1 percent of the population. In the past five years, the percentage of children in poverty increased from 16.5 percent to 21.0 percent of persons under age 18. In the past ten years, immunization coverage increased from 47.7 percent to 82.9 percent of children ages 19 to 35 months receiving complete immunizations. Since 1990, the prevalence of obesity increased from 11.3 percent to 29.2 percent of the population.

Childhood obesity bill introduced by Ohio Senators Kearney, Coughlin

In separate but related news, two Ohio senators, Democrat Eric Kearny of Cincinnati and Republican Kevin Coughlin of Cuyahoga Falls, introduced a bill (SB210) that involves Ohio schools in tackling the epidemic of childhood obesity.

Kearney, testifying before the Senate Health and Human Services Committee Tuesday, said the "failure to address obesity at an early age will lead to lifelong health issues and will come at enormous expense.”

Backed by various health and business oriented groups, the bill contains provisions that build physical activity into the daily school routine and make it a key component of making children active again, requiring Body Mass Index measurements as students age and ensuring that children have access to nutritious foods in their school setting.

Follow me on Twitter @ohionewsbureau. Read more stories on people, politics and government in Ohio here.

Tuesday, November 17, 2009

Morgan's Raiders ride out 10 bills Ohio House Republicans challenged Democrats to discuss, act on



November 17, 8:03 PMColumbus Government ExaminerJohn Michael Spinelli


Seth Morgan, an Ohio House Republican from Huber
Heights near Dayton, leads discussion today on GOP good
government bills. (Photo/Ohio House)

COLUMBUS, Ohio -- The quartet of mostly rookie Republican House members, led by Seth Morgan (R-Huber Heights), convened in a meeting room in the Ohio Statehouse the GOP has not seen the inside of for about 15 years because it controlled the House during themto trot out a stable of 10 good government bills they said deserve discussion and action now, but which they know will not be welcomed, let alone acted on by ruling Democrats.

The impact of the 10-bill package is to spur government, streamline efficiency, strengthen accountability and transparency in state government, while simultaneously working to reduce the economic turmoil suffered by Ohio families who have been hard hit by the national economic maelstrom.

Hard hit in both loss of jobs -- 641,800 according to information provided to reporters by House communication staff -- and an economy that can no longer produce the amount of revenue to sustain state government at its current, albeit reduced level of government. Ohio lawmakers need to fill a biennial budget hole of about $900 million.

But finding a consensus solution is still over the horizon. Republicans and Democrats, in the House and Senate, are staking their claim on how to build a vehicle that not only withstand the hit from filling the gapping budget pothole in front of it but will be engineered to withstand greater shocks from even larger, more distant potholes that await the state as soon as 2011, when the biennial budget train again chugs around the bend.

Leader of the pack

The leader of the GOP pack today was House Policy Committee Chairman Seth Morgan, the youngest person to be elected to Huber Heights City Council. The first-term member and MBA, told reporters that Ohio is facing real problems, and that The Future of Ohio - Government Reform package presented today represents a real solution to those problems. Morgan said the GOP package of bills represents "an effective, sustained effort to streamline government, reduce waste, and improve services for a brighter future for Ohio.”

Making up Morgan's Raiders were were Representatives from A to Z, literally. John Adams (R-Sidney), Ron Amstutz (R-Wooster), Peter Beck (R-Mason), Terry Blair (R-Washington Township) and Jim Zehringer (R- Fort Recovery), stood close by, no doubt as they did last evening when the group conducted a town hall forum in Blue Ash, a city north of Cincinnati, where the themes interwoven throughout the group's legislative strategy range from efficiency and accountability to state spending --

Rep. Beck, who represents the suburban community north of Blue Ash called Mason, is so new to the House that its Web site offers no picture or biography.

Morgan's Raiders said they will work to see that government is operating as transparently, effectively and economically as possible. All this good government will be propelled by the business management tactic of scrutinizing every tax dollar in order to reduce waste. But to fill Ohio’s nearly $900 million yawning budget deficit, the committee did not stray from their core message that long-term, sustainable solutions are needed now to address Ohio’s urgent economic needs.

“Tough fiscal times present opportunities,” said Amstutz, the only member of the group to serve in the Senate. “Our citizens are very supportive of making government more efficient as a cost savings tool."

Expressing their collective frustration with what they said has been "inaction and partisanship from House Democrats" over the last 11 months, the Republican Caucus established the Ohio House Policy Committee to explore sustainable solutions to the economic crisis. According to a media release, they believe that Ohio’s families, not political games, should be the focus of the Legislature. And to circumvent House partisanship, Morgan's raiders are taking their ideas from the floor of the House to the streets of their districts. They want feedback from the public to confirm their proposed agenda or to find other lasting improvements for Ohio’s families and small businesses.

John Adams of Sydney in west central Ohio, challenged the label affixed to them by House Democrats, that they are the "party of no." Adams, who finally had a sponsor hearing last week on his bill to radically consolidate state government, said Democrats are really talking about themselves. "They (Democrats) refuse to discuss the viable alternatives Republicans have offered and we are not content by returning to our resident taxpayers without ensuring state government is operating as efficiently as possible," the former Navy Seal said. "Instead of focusing on partisan games, it is time for the Ohio House to start a cooperative conversation that will get the economy moving again.”

House Republicans assembled the Policy Committee in light of the recent imbalance of education funding to have open discussions with the people of Ohio regarding the state’s future. Contained in the proposals discussed by the House Policy Committee are plans that would restructure state government by streamlining of the executive branch; examination of Medicaid fraud, waste and abuse; requiring conference committee reports to be publicly available for 48 hours prior to being considered by the House or Senate; reestablishing the Legislative Budget Office to provide nonpartisan financial oversight; and identifying other areas of wasteful, inefficient spending. The group echoed the theme that Republicans have offered these proposals as bills in the Ohio House as well as amendments to the budget, but that many ideas have been silenced or ignored by majority party Democrats.

Rookies to the rescue

Had the legislative rookies assembled today been members of the House when their party was the majority party, as recently as last year, they would have been on the receiving end of a fuselage of arrows of outrage of the same make they are now flying toward Democrats, who recaptured control of the House in last year's General Elections. These House Republicans, who are not speaking out of school but reflect the will of their caucus, said they hope that by discussing their long-term plans with the public, the Democrat controlled House will take heed of their legislative ideas, ones Morgan's Raiders said would help create jobs and grow Ohio’s economy.

“Our residents want less government and lower taxes,” Beck, a CPA and former councilman and mayor of Mason, said. “It is time for us to look at and act on ways to not only spend less taxpayer money, but make government more effective, efficient and leaner. We need to do more with less!"

Follow me on Twitter @ohionewsbureau. Read more stories on people, politics and government in Ohio here.

Monday, November 16, 2009

Ohio AG Cordray announces restitution by Vonage to Ohio customers in settlement


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Ohio AG Cordray announces restitution by Vonage to Ohio customers in settlement

November 16, 2:38 PMColumbus Government ExaminerJohn Michael Spinelli
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Ohio Attorney General Richard Cordray (Photo/AP)
COLUMBUS, Ohio -- Ohio Attorney General Richard Cordray announced that Ohioans will now be eligible to receive refunds from Vonage, one of the nation's largest providers of Internet-based phone service, for issues dating back five years, as part of a multistate settlement.
The settlement, signed by Ohio Attorney General Richard Cordray and made public Monday, requires Vonage to give refunds to eligible consumers who have filed complaints dating back to January 2004 as well as those who will file complaints through March 16, 2010.
Cordray, a Democrat running for a full term next year against GOP endorsed Mike DeWine, said in prepared remarks that Vonage is being held accountable for customer service and advertising practices that led Ohioans to be confused and dissatisfied. "As a result, consumers who had an issue with the company as far back as 2004 still have the opportunity to get a refund by filing a complaint with my office within the next 120 days," Cordray said.
An agency spokesman said the agreement is in answer to hundreds of complaints from consumers throughout the nation who had difficulty canceling their Vonage service. Kim Kowalski said that prior to the settlement, it had been Vonage's policy to pay additional incentives to its customer service representatives for retaining customers who called to cancel, causing many consumers to find it nearly impossible to terminate service. The settlement puts strict limitations on this practice and requires recording and verification of these phone calls.
Kowalski said the settlement also addresses a number of other advertising practices that have led to consumer confusion about the cost of Vonage equipment and service. Specifically, Vonage will be revising its disclosures regarding offers of "free" services, money back guarantees and trial periods.
As a result of the settlement, Kowalski said that a broad restitution plan requires Vonage to make refunds to eligible consumers – both those who filed complaints dating back to January 2004 and those who will file complaints through March 16, 2010 (120 days from settlement date). Vonage will also pay $3 million in civil penalties to states participating in the settlement. Ohio will receive $45,000.
In order to receive refunds under this settlement, Cordray is asking Ohioans who feel that they have been charged by Vonage for unauthorized services or products, paid for Vonage services after cancellation or did not receive the benefit of any advertised money back guarantee, to file complaints with his office through www.SpeakOutOhio.gov or by calling (800) 282-0515.
To view the settlement documents visit www.OhioAttorneyGeneral.gov/VonageSettlement.
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