Vodafone cops Commerce Commission court action

Commission takes action over billing practices

The Commerce Commission has taken Vodafone to court alleging that it billed customers for an extra month after they had cancelled their mobile contracts.

The Commission claims that under the contract terms Vodafone was owed payment only for services provided prior to the agreed termination date.

The Commission has filed ten separate charges in Auckland District Court under the Fair Trading Act covering the period from 1 January 2012 to 1 January 2017. The first hearing is set for 11 September.

Vodafone said the errors took place between January 2012 and December 2016 and were due to a combination of unintentional system and human errors, which it had since resolved.

Vodafone CEO Russell Stanners said the company was disappointed by the Commerce Commission’s decision. “We have had an ongoing dialogue with the Commission throughout their investigation, and they have acknowledged our cooperation.”

He said the billing errors in question had been unintentional. “We launched an extensive and pro-active initiative to put things right by tracking down customers, refunding credits and donating the balance to charity. We have made process and technical changes to avoid repeats of this issue going forward. Taking all of this into account, we hoped the Commerce Commission would opt for one of its other enforcement tools, rather than costly court proceedings.”

Vodafone said none of the funds improperly obtained had been retained. “To date, Vodafone has refunded $55,896.71 to 2,001 current and former customers. In addition, the company has made a charitable donation of $86,226.77, which equals the amount still unclaimed by 13,350 customers at 1 June 2018.

“Notwithstanding this donation, any customer who has been advised they have an outstanding credit is encouraged to get in touch with Vodafone to claim it.”

Not the first time.

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Vodafone has a long track record of falling foul of the Fair Trading Act, most spectacularly in September 2012 when it was fined close to $1.5 million on 21 charges brought by the Commerce Commission over marketing campaigns that breached the Fair Trading Act.

Most recently in April 2018, the Commission laid 27 charges against Vodafone in the Auckland District Court under the Fair Trading Act alleging false and misleading conduct in relation Vodafone’s FibreX advertising in the three regions where FibreX is offered — Wellington, Christchurch and Kapiti.

In September 2016 Vodafone was fined $165,000 for providing misleading information to its customers on its Red Essentials mobile phone plan, and overcharging them a total NZ$92,000, although most by less than $1.

In November 2011 Vodafone was fined $81,900 in the Auckland District Court after being found guilty of breaching the Fair Trading Act for its $1 a day mobile broadband offering in 2008, following a Commerce Commission action.

In August 2011 Vodafone was fined over $400,000 after pleading guilty to breaching the Fair Trading Act in relation to its Vodafone Live! mobile phone Internet service.


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