Vodafone New Zealand has been fined $165,000 in the Auckland District Court after pleading guilty to making false price representations in breach of the Fair Trading Act.
The Commerce Commission filed charges against Vodafone in May this year related 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.
However, Vodafone's billing system 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.
Affected customers were collectively overcharged approximately $92,000, though the majority of customers were overcharged by less than $1 each.
Commissioner Anna Rawlings said customers had since been refunded the amounts they were overcharged.
“It is vital that businesses invest in making sure they have strong compliance processes that can support these types of promotional offers, particularly when selling products to a significant customer base,” Rawlings said.
“Consumers rely on companies to invoice and debit them accurately, as many do not check the finer details.
“Overcharging a large number of customers a small amount can result in firms receiving large sums of money they are not entitled to, so they need to be vigilant to avoid misleading consumers and breaching the Act.”
Rawlings said this is Vodafone’s fourth sentencing under the Fair Trading Act in the past five years.
In August 2011 Vodafone was fined over $400,000 in relation to misleading representations about its Vodafone Live product while in November 2011 the telco was fined $82,000 for misleading mobile customers over its $1 a day data charges.
Furthermore, in September 2012 Vodafone was fined $960,000 in relation to advertising campaigns run from October 2006 - February 2009 for various broadband and mobile phone promotions including Broadband everywhere, Supa Prepay Connection Pack and Largest 3G Network.
Separately, in January 2014 Vodafone paid out over $260,000 to customers in a settlement reached with the Commission concerning the company’s promotion of the Broadband Lite service.