9 Jul 2012

Vodafone admits breaching Fair Trade Act

6:39 pm on 9 July 2012

Watchdog Consumer New Zealand is warning Vodafone customers to be wary of its deals, saying the company is cavalier about honouring the Fair Trading Act.

The telcommunications company on Monday admitted 21 breaches of the act by misleading its mobile internet and pre-pay customers.

At the Auckland District Court on Monday, it pleaded guilty to charges brought by the Commerce Commission and faces a fine of up to $4 million as each charge carries a maximum penalty of $200,000.

Vodafone admits its Broadband Everywhere campaign, which ran between 2006 and 2008, was not available in every part of New Zealand.

It also agreed that its 3G mobile phone network was not the largest and fastest as it claimed in advertising during 2008 and 2009.

The company also admitted that some pre-pay customers between 2007 and 2008 did not get a $10 bonus due to a computer programming failure.

Vodafone says it did not set out to mislead customers, but Consumer chief executive Sue Chetwin said on Monday that she is not so sure.

"They've been cavalier about some of the things that they've done and maybe they've thought they were going to get away with it.

"It's marketing 101 - they seem to breach the rules quite regularly and you'd have to hope that these significant fines are a signal to them that they can't continue to do that."

Vodafone will be sentenced in September this year.

In 2011, the company was fined $482,000 for misleading customers over the cost of its Vodafone Live and $1 a day services.