Unfair practices put telcos in dog box
Telecommunications companies 2degrees, Myrepublic, Spark and Vodafone have each received a warning from the competition watchdog over different, alleged breaches of the Fair Trading Act.
The Commerce Commission’s written warnings come after it signalled last month that it intended to make the telecommunications industry a ‘‘priority’’ because of the number of complaints it was generating.
While the warnings mostly relate to alleged marketing misdemeanours, the commission hinted at more action to come over what appear to be more serious matters, such as incorrect bills, false broadband usage readings and unfair contract terms.
Telecommunications Users Association chief executive Craig Young said the industry had become more competitive in recent years but it was not clear if companies’ behaviour had changed for better or worse.
The commission was right to be shining a spotlight on the sector, which had a ‘‘pretty chequered history’’, he said. ‘‘We have seen continued complaints around service levels from the telcos and the way they market to consumers.’’
Vodafone had made ‘‘misleading representations’’ about 12-month broadband plans bundled with ‘‘free’’ goods or services when, in order to receive the ‘‘free’’ goods or services people were required to pay additional fees or to take additional services, the commission said.
‘‘On some occasions, a monthly headline price was advertised, but that price did not include the additional fees to be paid in order to receive ‘free’ goods or services,’’ it said.
Spark had indicated that Vodafone’s 2G network was ‘‘imminently closing’’, while marketing its Skinny Mobile service, the commission said.
Internet provider Myrepublic got a telling-off on three counts.
The commission said it had promoted its 1 Gigabit-per-second broadband service up to two months before it was actually available.
It had also said customers on its Gamer broadband service would not experience lag or latency, when they could experience lag or latency caused by third-party servers, the watchdog said.
Myrepublic had also falsely claimed that consumers’ rights to cancel services under the ‘‘uninvited direct sales provisions’’ of the Fair Trading Act ceased to apply once Myrepublic had started providing the service to them, it said.
2degrees was rapped on the knuckles for making ‘‘misleading representations’’ about the price of its unlimited broadband plan, by not identifying or inadequately disclosing the additional cost of a modem and its delivery.
The commission was continuing to investigate ‘‘further potential issues in the sector’’, including incorrect billing and incorrect calculation of broadband usage, the watchdog said in a statement.