The Commerce Commission has received 13 complaints about the social media advertising company Social Pages.
All complaints concerned fees charged by the company, which many small-business owners claimed were thousands of dollars more than what they had intended to agree to after being cold-called by the company and entering into contracts over the phone.
"We are still assessing those complaints," a Commerce Commission spokesman said.
Another woman complained to the company directly after she found out her business was being falsely used as a success story, including fake page-view statistics and booking numbers alleged to be the result of Social Pages' advertising work.
Social Pages' director Warren Pearson admitted that incident had occurred but said he had apologised and that it was the fault of a rogue staff member who was fired immediately.
The Herald spoke to a handful of small-business owners who described feeling trapped in a 12-month contract paying monthly fees for advertising they hadn't intended to agree to, having meant to pay only a one-off $99 fee.
They said they complained after realising they were being charged much more than they anticipated.
They claim Pearson told them they could not opt out of the contract because they had agreed to it over the phone.
Several said that, after complaining, lump sums were taken from their account to pay out the full 12 months at once and "end" the contract.
One woman said she had $4788.60 taken from her account at once.
Pearson has defended his company, saying his staff were clear when reading out the verbal contracts and those complaining simply had "buyer's remorse".
"We speak English. Our verbal contract is very simple to understand."
The number of complaints represented a fraction of his client base, most of who were happy with the service they received, he said.
"I think people are trying to [find] any way out of a contract."
Pearson would not consider changing his company's practice of holding people to verbal agreements because the low number of complaints "doesn't warrant it", he said.
Shore Finance owner Andy Gunmer disagreed Pearson's staff were clear about what it was they were offering over the phone.
His story echoed that of others the Herald spoke to, describing how his son took a call from a Social Pages staffer who he claimed appeared to be offering a one-off $99 ad creation with the potential to sign up for a longer contract if he liked the results.
In an audio recording of the call cited by the Herald, a staffer can be heard saying: "You have chosen a 12-month agreement for Facebook advertising, the amount we will take now is only $99."
He then goes on to say once the ad is sent out a further charge will be added, and Gunmer's son Daniel can be heard agreeing.
Gunmer said his son thought he had time to consider the offer once the ad had been created and proceed with further charges if he liked what he saw, but a few days later a fee of several hundred dollars was taken from his bank account.
When he challenged Social Pages, he was told they'd agreed to the entire 12 months and could not opt out.
In an email supplied to the Herald by Pearson, Gunmer wrote that he withdrew his complaint with the company, but still felt that his son had been misled.
Gunmer said he thought he couldn't get out of the contract so would give Social Pages' services a go.
However, after three months he was not happy with the results, and tried again to leave the contract.
He was able to negotiate to leave early.
Chatham Islands charter fishing company owner Porsha Meo's story was similar to Gunmer's.
Meo said she was cold-called by a Social Pages staffer in April.
She discussed prices for a 12-month contract but thought she was verbally agreeing only to the $99 ad creation with time to think about a longer contract, which turned out not to be the case.
"It was so full on," Meo said.
"I thought it was just the ad creation. Then you check it out, and you go from there."
When Meo complained, a lump sum of $4788.60 was taken out of her account.
"I was nearly broke.
"I've got a three-year-old son to support and we've got big bills, we had that money put aside."
Meo said she felt the conversation she had over the phone did not make it clear what she was entering into or give her enough time to think about it.
About an hour after the Herald contacted Social Pages, Meo got in touch with us to say the company had offered her a full refund, which Pearson confirmed.
Contract lawyer Andrew Knight said anyone signing a contract should be sure not to agree to anything verbally.
"Often with this sort of stuff, people don't get to review things appropriately and the only way you can is to get it all in front of you in writing."
People who felt they had been misled should complain to the Commerce Commission, Knight said.