Almost 8000 customers did not receive a text reminding them to opt-out of the service and 3000 customers cancelled the service but were still charged for it, the Commission said.
The Commission believed the promotion breached the Fair Trading Act but has settled the matter with Vodafone, which has made a $268,231.38 payout to affected customers.
In a settlement agreement, Vodafone agreed that it was likely to have breached the Act.
The Commission said the telco "took active steps to identify and rectify the issues" once the regulator made enquiries.
"In reaching the decision to settle, we took into account the fact that Vodafone put things right as soon as it became aware of the problems. Nonetheless, the case highlights the potential problems with 'opt-out' sales promotions," said Commerce Commission Consumer Manager Stuart Wallace.
"Such promotions require the consumer to take an active step in order to not buy something. Customers can be locked into a deal that they don't want and maybe did not understand. Unless the 'opt-out' condition is very clearly disclosed, these promotions have a high risk of being misleading and in breach of the Fair Trading Act," Wallace said.
Numerous Vodafone's promotion have come under fire from the Commerce Commission over recent years in Fair Trading Act cases.
In September 2012, it was fined $960,000 for misleading advertising over a free air-time deal and the coverage of its wireless broadband network. In November 2011 it was fined $81,900 for misleading customers over "$1 a day" mobile data charges and in August 2011 it was fine $400,000 for misleading customers over its Vodafone Live! service.
