Consumer Watch: Watchdog set to bite

By Susan Edmunds

Private Prosecution alleges harassment and coercion over contracts

Graham McCready is lining up some of our biggest corporates with a service he says will get justice for ripped-off customers. Photo / Anthony Phelps
Graham McCready is lining up some of our biggest corporates with a service he says will get justice for ripped-off customers. Photo / Anthony Phelps

A retired man with a track record of taking big-name Kiwis through the courts is lining up some of our biggest corporates with a service he says will get justice for ripped-off customers.

Graham McCready, who once took a successful private prosecution against Labour MP Trevor Mallard, is now taking on Vodafone in his first court case as Private Prosecution Ltd, claiming the telco is effectively trapping people on fixed-term contracts.

Private Prosecution Ltd is a no-cost, no-fee community prosecution service that will be self-funded from successful prosecutions.

McCready filed papers in the Wellington District Court on Friday, claiming Vodafone Fixed Ltd, trading as TelstraClear, breached the Fair Trading Act by "using harassment and coercion to collect an illegal debt for service". Vodafone denies it has done wrong.

McCready claims Kapiti woman Roslyn Paul was charged $250 in cancellation fees that had not been made clear to her. He says she was told over the phone that she was not allowed to cancel her account, or the account she had set up for a friend, until all owed charges were paid.

In a separate incident, McCready says Wellingtonian Darren Kemp was not able to cancel his landline account when he moved house.

Kemp told the Herald on Sunday: "Even though I got the Wellington Council housing manager to contact them and tell them I'd moved, the dial-up and landline continued."

Ten weeks later he received a call from Baycorp, which had added collection fees.

McCready says it is unfair and vulnerable, low-income families are having their credit histories ruined. "People then can't get a bank loan, they go to loan sharks. There are ramifications down the line."

He says fixed-term contracts set people up to fail. "Vodafone, by one way or another, gets the customer to breach them. Then they will not disconnect the service and are very quick to send it to collection. The collection agency puts on a $200 collection fee to collect an illegal debt." McCready says the charges filed are representative as many more people will be affected.

TelstraClear wrote to Paul last month and told her it would waive the $250 fee because she was a long-term customer, and would write off the debt "on the basis that it resolves all matters with respect to both of your accounts once and for all".

A spokesman says the early termination fees had been explained to Paul and a recording of the phone call was sent to her. He says accounts that are in arrears are dealt with on a case-by-case basis. If a customer has a good credit history, TelstraClear might allow it to go unpaid for a period of time before it was cut off.

A Commerce Commission spokeswoman says it is a contract issue.

"If Vodafone has spelled out how the process works in their terms and conditions, then it's unlikely that the customer has been misled. Under the Fair Trading Act, we are looking for misleading or deceitful information provided to a customer."

McCready says it is not fair that people are being billed even after they try to cancel their accounts. "That's coercion, getting paid for something you are not providing." He says he hopes to receive more complaints so that they can all be taken to court.

The maximum fine for the charges McCready is alleging is $200,000.

As an alternative, McCready has suggested Vodafone compensate those affected and pay the Maori Women's Refuge $10,000.

- Herald on Sunday

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