Spark upset to face charges after making ‘genuine errors’
Watchdog accuses telco of overcharging and misleading customers about offer Z Energy putting $1.5m into forestry
New Zealand’s competition watchdog has filed 11 charges against Spark, alleging the telco misled customers. The charges were filed in Auckland District Court by the Commerce Commission under the Fair Trading Act and cover the period June 2, 2014, to December 7, 2017.
The commission says the charges arose from the following three issues:
Spark overcharged customers for broadband data when a fault in its broadband network misrecorded customer data usage.
Spark sent letters offering new customers a $100 account credit for subscribing to a particular broadband plan but failed to mention the offer could only be redeemed by phoning Spark. The offers allegedly created the impression that customers signing up online would receive the credit, when they would not.
From June 2, 2014, Spark’s terms and conditions said charges would stop 30 days after the customer gave notice to terminate a contract. However, the commission alleges that the customer’s final bill included charges for the entire next monthly billing period regardless of when the Spark service stopped.
Spark said it had already applied credits to the accounts of all affected customers and, for former customers, had made extensive efforts to return all money owed so that they received the benefit of their credit.
While Spark has already refunded many of these former customers over the past 12 months, it has been seeking to reach more of them as part of its “Make Sure You Get What’s Yours” consumer campaign launched in May this year.
Through this campaign, Spark has so far returned over $1.1 million to customers in credits owing.
“These were all system-based errors caused by genuine mistakes with no malicious intent involved on the part of Spark. That being said, we are deeply disappointed that these issues have affected our customers,” said Spark’s managing director, Simon Moutter.
Given all the steps Spark had taken to rectify the matters, Moutter said he was disappointed in the commission’s decision to pursue legal action.
“Our preference has consistently been to settle these matters and avoid court proceedings,” Moutter said.
“To this end we have held extensive discussions with the Commerce Commission, including our suggestion that we make a settlement payment (possibly in the form of further charitable donations) to acknowledge our errors.” Spark notes that the 2015 equipment fault issue has been resolved for all 5325 affected customers, with credits or compensation totalling $216,937.
This was also the case for the 2016 “welcome credit” issue, with all 463 affected customers being paid back the credits totalling $46,300.
The 30-day billing issue has been more complicated to solve, in that a number of customers left Spark over the three-year period. As of last week, Spark said there were up to 8829 former customers, owed a total of $304,070, who despite the company’s campaign had not responded.
“As a business, we’ve been through a massive amount of change over the last few years and this has significantly improved our customerservice delivery. These errors were for the most part an unfortunate and unintended consequence of some of the change we’ve been through and we regret that they occurred,” Moutter said.
Spark said it would review the Commerce Commission’s proceedings and had yet to determine the position it would take in response. Spark’s Simon Moutter said the charges were a disappointment. Gerri Ward says Z has committed to reducing operational carbon emissions by 30 per cent by 2020. Z Energy will spend $1.5 million this year in forestry projects to voluntarily offset the emissions from its fuel delivery operations.
The company says it represents the largest voluntary purchase of units from permanent forest sinks seen in New Zealand to date.
Z’s sustainability manager, Gerri Ward, said her company had committed to reducing operational carbon emissions by 30 per cent by 2020, and offsetting those it was unable to avoid.
The offset scheme covers the impact of transporting Z fuel around the country by road and sea, corporate travel and electricity.
It does not cover the cost of offsetting emissions from the fuel it sells, which she said was estimated at $70m.
Ward said the company didn’t want to overstate its green credentials.
Z has partnered with longstanding carbon consultant Permanent Forests NZ (PFNZ), which specialises in aggregating, marketing and selling New Zealand forest carbon credits on behalf of owners of forests registered under the Permanent Forest Sink Initiative.
“The integrity of our offsets is absolutely paramount. By locking up the carbon in these long-lived forestry projects, we know we’re getting authentic outcomes which we can stand by,” Ward said.
PFNZ’s managing director, Ollie Belton, said many possible participants in the voluntary carbon market were deterred by its complexity, the lack of links between the compliance and voluntary markets, and the shortage of available permanent carbon offsets.
“This deal with Z will undoubtedly make others sit up and take notice, and will lead to more land being committed to long-term carbon conservation,” Belton said.
Z’s operational carbon emissions, including those from corporate travel, retail electricity, coastal emissions, and hauliers come to about 58,000 tonnes of CO2-e (carbon dioxide equivalent) a year. At an average cost of about $25 per tonne, this comes to an annual cost of about $1.5m.
Alongside the offset programme, Z continues to focus on reducing the carbon intensity of its business.
Z’s biodiesel plant in Wiri is operational — although not producing in commercial quantities, and the company had increased its investment in Wellington-based electric ride-sharing company, Mevo.