It didn't take long for the Commerce Commission to start fulfilling its promise to crack down on sales and marketing practices in the telecommunications industry.
The Commission has warned four telecommunications companies about specific conduct that it considers breach the Fair Trading Act.
Warnings have been sent to MyRepublic, Two Degrees, Spark and Vodafone for a raft of alleged breaches.
The letters follow the Commission’s announcement last month that retail telecommunications will be a priority for the 2017/18 year.
The companies have been warned that, In the Commission’s view, they are likely to have breached the Fair Trading Act by:
• Promoting its 1 Gigabit per second service up to two months before it was actually available
• Representing that customers on its GAMER broadband service would not experience lag or latency when they could experience lag or latency caused by third party servers
• Incorrect representations that consumers’ rights of cancellation under the uninvited direct sales provisions of the Fair Trading Act ceased to apply once MyRepublic had commenced the service
• Making misleading representations about the price of its unlimited broadband plan, by not identifying or inadequately disclosing the additional cost of a modem and its delivery
• Making representations that Vodafone’s 2G network was imminently closing, in the marketing of Spark’s Skinny Mobile service
• Making misleading representations in the promotion of 12 month broadband plans bundled with “free” goods or services when, in order to receive the “free” goods or services, the consumer was required to pay additional fees or to take additional services
• On some occasions, a monthly headline price was advertised, but that price did not include the additional fees to be paid in order to receive “free” goods or services.
“The complexity and range of goods and services offered by the industry means consumers can be easily confused about product offerings," said Commissioner Anna Rawlings.
"Almost every New Zealander uses a mobile or fixed-line phone and broadband, so the telecommunications sector has the potential to have a significant impact on consumers."
The Commission is continuing to investigate further potential issues in the sector, including incorrect billing, failures to identify the subscription nature of mobile add-ons, incorrect calculation of broadband usage, unfair contract terms and representations concerning the nature and availability of internet services.
The Commission has taken a number of prosecutions or actions against telecommunication companies in recent years, including against Trustpower, which was fined $390,000 in September 2016 for misleading consumers over the price and terms of its bundled electricity and unlimited data broadband offer.
Also in September 2016, Vodafone was fined $165,000 for false price representations on invoices.