The Commerce Commission has filed court proceedings against Vodafone New Zealand, alleging it breached the Fair Trading Act by making false price representations.
According to Commission findings, the proceedings relate to invoices sent to customers who signed on to the ‘Red Essentials’ mobile phone plan between January and December 2014.
Vodafone launched the Red Essentials plan at $79 (including GST) per month in August 2013 and subsequently reduced the price to $69 in January 2014 in response to market competition.
Consequently, the Commission alleges Vodafone did not accurately apply this $10 discount to customers who signed up to the Red Essentials plan from its introduction through to December 2014, causing misleading invoices to be sent to approximately 15,000 customers.
As a result, affected customers were overcharged just over $90,000 and following the Commission’s investigation Vodafone has issued refunds to approximately 98 percent of affected customers.
“Vodafone made a mistake with the discounting of the Red Essentials Plan in 2014 and we apologise to our affected customers,” a company statement read in response.
For the Vodafone customers impacted by the price change, the telco says a discount was applied to their account from the processing date, when it should have been backdated to the date the customer signed up to the plan.
According to the company, for the vast majority of these customers, the overcharged amount was less than $1 per customer while for very small group of customers, the discounted plan price was not applied.
“We recognise that a mistake was made in this instance and apologise to our customers,” adds Kelly Moore, Customer Operations Director, Vodafone.
“When the error was identified, all efforts were undertaken to contact the impacted Vodafone customers, advise them of the billing error, and process refunds. Over 98 per cent of impacted customers (all of those able to be contacted) were refunded last year.
“We also identified what lead to the error and have already taken corrective action.”
Moore says Vodafone has “fully cooperated and assisted” with the Commission throughout the investigation.
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