Smarten up your act, watchdog warns Telecom

Telecom has been stung with its eighth Fair Trading Act breach by the Commerce Commission.

Telecom has admitted breaching the Fair Trading Act by misleading more than 130,000 broadband customers.

The admission comes in a settlement with the Commerce Commission, made public yesterday.

But although Telecom had co-operated in putting things right, the commission said it was concerned at the number of times the company had fallen foul of the act.

The latest case stemmed from Telecom's introduction of a broadband internet service in 1999, when it offered existing dial-up customers the opportunity to switch to broadband.

These customers would continue to have a dial-up connection, but not be charged for it.

But between 1999 and 2006, because of administrative errors, Telecom continued to bill customers, resulting in an over-charge of more than $9.5 million.

Telecom admitted it had breached the act, and in March 2007 it began refunding more than 130,000 affected customers and writing to them to advise them of the error.

"Customers trust that businesses will have the correct processes in place and that they will be charged the right price," said the commission's fair trading manager in Auckland, Graham Gill.

"Although we encourage consumers to check their monthly statement, businesses should get it right.

"Telecom has co-operated with the commission's investigation and undertaken a costly internal exercise to refund all affected customers. It has also agreed as part of this settlement to introduce procedures to prevent a repeat of this sort of failure.

"Nonetheless, the commission is becoming increasingly concerned at the number of occasions on which Telecom has acted in breach of the Fair Trading Act."

Since 2003, it had been the subject of Fair Trading Act convictions, settlements or warnings on at least eight occasions.

"The commission encourages Telecom to make compliance with the act a top priority," Mr Gill said.

The commission has taken Telecom to task over advertising of its mobile network, mobile billing faults, mobile phone deals, double billing, advertising of its broadband deals andits charges for broadband.

The issues have been settled in and out of court.

Telecom's head of external media, Mark Watts, said the company had not breached the act deliberately and it was not ignorant of the rules.

"We made some serious errors and we work hard to put them right."

Telecom took the act very seriously at all times, and was aware of its responsibilities under it.

It had been on a concerted drive to resolve as many issues as it could and to take its compliance to best practice levels, he said.

Telecom's retail chief executive, Alan Gourdie, said the company was pleased to have reached a settlement over the latest investigation.

"On becoming aware of the issue in 2006, Telecom investigated the cause of the problem, and did the right thing for our customers."

The refund process was completed early last year.

Telecom says it has not been able to trace about 1400 customers to refund them, but the credit has been applied to their inactive accounts.

- NZPA