Mercury NZ was found to have breached the Fair Trading Act. Photo: 123RF
One of the country's largest electricity retailers has been fined $279,500 for misleading customers over early termination fees.
Mercury NZ was found to have breached the Fair Trading Act for telling 2000 customers they were to pay an early termination fee, when the fee policy had already been changed.
The company changed its terms and conditions in 2016, axing the early termination fee for customers cancelling an automatically renewed fixed term plan, but was still telling some customers between 2017 and 2020 they had to pay the fee.
Some were told the fee would be waived if they remained a Mercury customer.
Mercury has since refunded most of the people it incorrectly charged.
In a reserved decision released by the Auckland District Court, Judge Lance said the representations were a material departure from the truth that endured for a reasonably lengthy period.
He said companies that supplied essential services, such as electricity, had a responsibility not to mislead customers.
Commerce Commission general manager of fair trading Kirsten Mannix said businesses must ensure they gave consumers an accurate picture of their rights and staff must be properly trained following any changes.
"Our investigation identified problems within Mercury's billing systems, resulting in representations that misled a number of customers," she said.
"Not only can misrepresentations like these cause stress and harm to consumers, electricity retail is an essential service, and the ability of consumers to switch providers in line with the contracts is vital to maintain a competitive market."
In a statement, Mercury general manager commercial operations Craig Neustroski said the company was extremly disappointed the incident occurred.
"We acknowledge we got things wrong in this case - it was a genuine mistake and we have focused on making things right as quickly as possible.
"We completed remediation almost two years ago, which included apologising to impacted customers, providing refunds and a small additional payment in acknowledgment of our error."
Neustroski said that in the small number of cases in which the company was unable to locate an affected customer, Mercury set aside their unclaimed credit which would be refunded when the customer was located, with the equivalent of their unclaimed credit balance also donated to Starship.
