Telco retailers CallPlus Services, trading as Slingshot, Flip Services and Orcon, all Vocus NZ subsidiaries, have been fined $121,500 for making “false representations” in invoices they sent to customers.
According to the Commerce Commission, the companies pleaded guilty and were subsequently convicted in relation to 13 charges under the Fair Trading Act for conduct that occurred over a period of six years between 2012 and 2018.
The Commerce Commission said that the three companies’ terms and conditions claimed charges for their customers’ internet and/or landline services would stop one month after those customers gave notice to terminate their contracts.
However, the companies issued final invoices that included charges for services beyond the one-month notice period to nearly 6,000 customers, the competition watchdog said.
This action, according to Comcom, meant that the companies misrepresented their rights to payments because their customers only owed payment for the services provided before to the agreed termination date.
As a result, customers overpaid around $132,000, the Commission said.
In a statement, Comcom said that although each company had internal instructions for billing staff to manually adjust invoices, the instructions were applied inconsistently.
Auckland District Court judge Kevin Glubb, who presided over the case, suggested that it was incumbent upon the companies to put in checks and balances to ensure no misrepresentations.
“It was not inadvertent but nor was it deliberate. Rather, it was a failure to implement and then ensure proper processes were operating” Glubb said. “This was highly careless.”
According to Commerce Commission chair Anna Rawlings, the latest ruling is the third case the Commission has concluded in the past year relating to telecommunications providers billing customers after their contracts finished.
“We hope these convictions reiterate to all businesses that it is essential they ensure their billing systems are robust and they are making accurate representations when they invoice their customers,” she said.
The issue occurred in some instances when people gave more than 30 days’ notice of leaving which required Vocus relying on a non-automated process to properly issue the final invoice.
In a statement to Reseller News, Vocus said it accepted that "mistakes were made" while determining the final bill for a "small percentage of customers".
"We had quickly developed a software solution to fix the mistake shortly after the Commission brought the issue to our attention and commenced contacting customers to issue refunds," the telco added. "So whilst we were surprised the Commission decided to still take the matter to court, we have accepted our mistake."
In May last year, Vodafone NZ was fined $350,000 in the Auckland District Court, following its guilty plea in February 2019 for breaches of the Fair Trading Act.
Spark New Zealand, meanwhile, was fined $675,000 in April 2019 for making "false or misleading" representations in its customer invoicing, and when making a $100 credit offer to new users.