Some Yahoo!Xtra Bubble customers are having to wade through hundreds of spam messages to find their legitimate emails.
Judy Newell said she has 500 spam emails - some dating back to 2005 - in her inbox and almost deleted them, before realising the folder contained messages from organisations and people she knew.
Ms Newell said she is offended by some of the spam which includes advertisements for penis enlargements, Viagra and other drugs.
"I don't need that, I'm 67-years-old," she said.
She said she has been ringing Xtra but claimed the call centre staff are unhelpful.
Ms Newell said people may be deleting the contents of their spam folder and not realising that they're deleting legitimate mail.
"It's a big stuff up," she said.
And Ms Newell is not alone. Another reader said: "I have just discovered that if you were previously using the Xtra spam filter the Bubble service also has the spam filter switched on.
"The problem with this is it is now treating email from valid users as spam, so as least half my mail was being deleted without my knowledge.
"The spam filter is so stupid it has even classifed email from another xtra.co.nz address as spam."
The Xtra newsletter has even ended up in the junk mail folder, one customer said.
On Tuesday the Herald reported that Telecom, which owns Xtra, has linked the faults to an upgrade that took place over the weekend.
Many customers have reported to the Herald that they have received more spam than usual.
This afternoon Telecom confirmed compensation would be offered to customers who lost access to their email during the weekend.
Telecom head of consumer propositions Adrian Littlewood told NZPA what kind of compensation would be offered had not yet been established, because it was the company's first priority to get all customers up and running.
Some users have been without e-mail for six days following last weekend's upgrade to the Yahoo!Xtra Bubble service.
Mr Littlewood said the majority of customers were now able to access their e-mail normally.
However, a small group of customers were still needing individual help to get things running on their own computers.
He was not sure when everyone would be re-established but said the number of queues for the helpline had decreased significantly although waiting times were still long.
"Certainly we can see things starting to die off.
" ...While there is still any one person with an issue we will be working really hard to fix it. I can't say exactly when that will be, but hopefully really shortly."
Mr Littlewood advised anyone still having problems to visit Xtra's website for online assistance or ring the helpline.
He said the problem had been difficult to fix because it had come about from a number of issues. It stemmed from a technical fault which meant some customers were unable to register for the new service or access their webmail.
The upgrade had been planned for a long time and Telecom was "naturally very upset about the impact", he said.
"But we are taking on board all the things that have gone on and we'll do our level best to make sure this never happens again."
The upgrade was to offer users a homepage with email, photo and data storage, Norton AntiVirus and other security tools.
- Additional reporting NZPA