Vodafone NZ pleads guilty to making false price representations, fined $165k

Wednesday 14th September 2016

Vodafone New Zealand has been fined $165,000 after pleading guilty to making false price representations to customers on its 'Red Essentials' mobile phone plan, its fourth conviction under the Fair Trading Act in the past five years.

The telecommunications provider launched the plan at $79 per month in August 2013 and reduced the price to $69 in January 2014 in response to market competition, but its billing system didn't apply the discount to customers who had signed up between its launch and December 2014, meaning it sent misleading invoices to about 15,000 customers, the Commerce Commission said in a statement.

The affected customers were collectively overcharged approximately $92,000, though the majority of customers were overcharged by less than $1 each, and have since been refunded, the watchdog said.

"It is vital that businesses invest in making sure they have strong compliance processes that can support these types of promotional offers, particularly when selling products to a significant customer base," Commissioner Anna Rawlings said. "Consumers rely on companies to invoice and debit them accurately, as many do not check the finer details. Overcharging a large number of customers a small amount can result in firms receiving large sums of money they are not entitled to, so they need to be vigilant to avoid misleading consumers and breaching the act."

In Sept. 2012, the company was fined $960,000 in relation to its advertising of broadband and mobile phone promotions which ran between 2006 and 2009 including Broadband everywhere, Supa Prepay Connection Pack and Largest 3G Network. It had been fined about $480,000 in August 2011 after pleading guilty to the first charge in that investigation, for misleading representations of its Vodafone Live! mobile phone internet service. It was fined $82,000 in Nov. 2011 for misleading mobile customers over its $1 a day data charges.

BusinessDesk.co.nz

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