13 Apr 2019

Spark misleading customers 'a massive incompetence'

6:42 am on 13 April 2019

It's not good enough that big telecommunications companies keep making basic errors that result in their customers being misled, Consumer New Zealand says.

Spark New Zealand

Photo: RNZ / Kim Baker Wilson

Yesterday, Spark was fined $675,000 in the Auckland District Court, after pleading guilty to nine charges laid by the Commerce Commission under the Fair Trading Act.

Eight of the charges related to making false or misleading representations in its customer invoicing between June 2014 and December 2017.

Spark's terms and conditions said charges would stop 30 days after customers gave notice to terminate their contracts.

However, final bills sent to nearly 72,000 customers included charges for services beyond the 30 day termination period, the Commerce Commission said.

The other charge related to promotional letters sent to prospective Spark customers, offering a $100 account credit if they joined Spark and subscribed to a particular broadband plan.

The letters gave the impression that new customers could sign up online to receive the credit, when they could not. In fact, the credit would only be paid if customers telephoned Spark to sign up for the plan.

Consumer New Zealand chief executive Sue Chetwin said it's not good enough that these sorts of mistakes are being made by companies like Spark.

She questioned how marketing departments got approval for campaigns that clearly breach the Fair Trading Act.

"There may not have been malicious intent, but there's certainly a massive incompetence there," she said.

"This is a very big company, it's involved thousands of customers, and very big errors, and it's not the first time."

Ms Chetwin said the penalty handed down to Spark could have been a lot higher.

Spark said it's fully refunded all existing customers and the vast majority of former customers.

Customers who were invoiced incorrectly overpaid a total of $6.6 million, with an average overcharge of $90 per person, the Commerce Commission said.

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