$132k error Internet users overcharged
Three telecommunications companies have been fined $121,500 for billing customers after their contracts had ended.
Flip Services, Orcon and CallPlus Services, trading as Slingshot, pleaded guilty to making false representations in invoices they sent to customers.
The companies were charged with breaching the Fair Trading Act for invoices sent out between January 2, 2012 and March 1, 2018.
All three companies’ terms and conditions said charges for customers’ internet or landline services would stop one month after notice to terminate their contracts was given.
However, final invoices issued to nearly 6000 customers included charges for services beyond the one-month notice period. In doing so, the companies misrepresented their rights to payments because their customers only owed payment for the services provided prior to the agreed termination date.
Customers throughout the country overpaid around $132,000.
In sentencing in the Auckland District Court, Judge Kevin Glubb said it was the responsibility of companies to implement checks and balances to ensure there were no misrepresentations in the terms and conditions of contracts.
‘‘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.’’ Commerce Commission chairwoman Anna Rawlings said customers had the right to expect that businesses would invoice them accurately.
‘‘We expect businesses to have the processes in place to ensure that their invoices are accurate and compliant with what they tell their customers and with the Fair Trading Act,’’ she said.
‘‘In this case, each company failed to take necessary steps to ensure they were. As a result, they misled and overcharged thousands of customers.’’
While each company had internal instructions for billing staff to manually adjust invoices, the instructions were applied inconsistently, Rawlings said.
In the last year the commission has dealt with three telecommunications companies relating to the billing of customers after the end of their contracts.
‘‘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,’’ Rawlings said.
CallPlus Services, Flip Services and Orcon are each subsidiaries of parent company Vocus (New Zealand) Holdings Limited.
In March Spark was fined $675,000 after pleading guilty to charges relating to misleading consumers in its customer invoicing. Vodafone was also fined $350,000 after pleading guilty to charges relating to false representations in invoices.