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Commerce Commission Fines Vodafone $350,000 For Billing Customers After Contracts End


Retail telecommunications provider Vodafone New Zealand Limited has been fined $350,000 for making false representations in invoices it sent to customers. 

Vodafone pleaded guilty and was convicted in relation to 14 charges under the Fair Trading Act for conduct that occurred between January 2012 and December 2018.

Despite Vodafone’s contractual terms and conditions stating it would stop charging customers either 30 days after they gave notice to terminate their contracts or on an agreed date, Vodafone sent invoices to more than 29,000 customers that included charges beyond the agreed date of termination. As a result, customers across three of Vodafone’s billing systems overpaid around $285,000. 

“Customers have the right to expect businesses to invoice them accurately and it is vital businesses take care to ensure their billing systems and processes are doing that,” said Competition and Consumer General Manager Antonia Horrocks.

“For a large proportion of the affected invoices in this case, Vodafone relied on staff to manually adjust them but did not take adequate steps to ensure that process was being consistently followed. As a result, tens of thousands of customers were left out of pocket.” 

“All businesses need to ensure that their billing systems are robust, and that they are making accurate representations when they invoice their customers,” said Ms Horrocks.

In sentencing in the Auckland District Court Judge Thomas described Vodafone’s representations as highly careless, saying a deterrent penalty was justified as the market needs to have faith in the conduct of its major players.

“Vodafone breached the trust that all consumers should be entitled to place in suppliers’ representations,” said Judge Thomas. 

Background

Last month retail telecommunications provider Spark was fined $675,000 after pleading guilty to charges relating to misrepresentations in its customer invoicing and a $100 welcome credit offer to new customers. 

In 2016 Vodafone was fined $165,000 in the Auckland District Court after pleading guilty to making false price representations in breach of the Fair Trading Act. The charges related to invoices sent to customers who signed on to the ‘Red Essentials’ mobile phone plan in 2014. 

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