Vodafone has been fined $165,000 for making false price representations in breach of the Fair Trading Act after the Commerce Commission filed charges against the company in May. It is Vodafone’s fourth fine for infringement of the Fair Trading Act in the past five years. For these and an out of court settlement with the Commerce Commission the company has paid close to $2 million.
Vodafone pleaded guilty to the latest charges, which related to invoices sent to customers who had signed on to the ‘Red Essentials’ mobile phone plan between January and December 2014. Vodafone launched the 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.
According to the Commerce Commission, affected customers were collectively overcharged approximately $92,000 although 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.”
In August 2011 Vodafone was fined over $400,000 in relation to misleading representations about its Vodafone Live product. In November 2011 it was fined $82,000 for misleading mobile customers over its $1 a day data charges. In September 2012 it was fined $960,000 in relation to advertising campaigns run from October 2006 to February 2009 for various broadband and mobile phone promotions including Broadband everywhere, Supa Prepay Connection Pack and Largest 3G Network.
In January 2014 Vodafone paid out over $260,000 to customers in a settlement reached with the Commerce Commission concerning its promotion of the Broadband Lite service.