Vonage Holdings Corp said on Monday that it would pay $3 million to settle a previously disclosed investigation of its business practices in 32 states by state attorneys general.

The Internet telephony provider said that while there was no finding of any violation or wrongdoing by the company, it has promised to give refunds to affected customers and to change its business practices as part of the settlement.

Vonage said it had made a reserve in the second quarter of 2009 for the amount of the payment to the states and the customer refunds, and in September, it said it had placed into escrow the $3 million payment to the states.

It said it would file for court approval for the settlement where this is needed.

Vonage shares fell 2 cents or 1.5 percent to $1.29 on New York Stock Exchange after the news.

(Reporting by Sinead Carew)

Settlement