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$165,000 fine for Vodafone false price representations

15 September 2016

Vodafone New Zealand Ltd 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 1986.

It was the fourth time in five years that Vodafone has been sentenced under the Fair Trading Act. The fines imposed now total over $1,607,000 along with a $260,000 payment made in January 2014 a settlement reached with the Commission over Vodafone's promotion of its Broadband Lite service. 

The Commerce Commission says it filed charges against Vodafone in May 2016 related to invoices sent to customers who signed on to the "Red Essentials" mobile phone plan between January and December 2014.

It says 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, the Commission says, although the majority of customers were overcharged by less than $1 each.

Commissioner Anna Rawlings says customers have 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," Ms Rawlings says.

Last updated on the 16th September 2019