One NZ gets mega fine for way it marketed internet service
Record sentence given for misleading consumers is now even higher.
The record fine One NZ was given last year for misleading consumers over its FibreX broadband service is now even higher.
The telco, formerly known as Vodafone, had been sentenced to pay $2.25 million – but a High Court appeal by the Commerce Commission has seen that jump to $3.675 million.
The commission described the fine from the District Court sentencing last year as “manifestly inadequate”, despite it being the highest ever for a breach of the Fair Trading Act, so appealed to the High Court.
One NZ also appealed the conviction and sentence, but failed.
In the High Court judgement, Justice Moore said the fine needed to be higher “to ensure the penalty stings”.
Commerce Commission chair John Small said the new fine was a significant win for consumers and a strong deterrent to other businesses.
FibreX was offered in Wellington, Kāpiti and Christchurch between 2016 and 2018. One NZ’s marketing of the product included phrases such as “FibreX is here” or “FibreX has arrived”. But FibreX didn’t connect people to the ultrafast broadband network that was being rolled out at the same time. It only used fibre-optic cable to the street cabinet, then copper cable from there to the home.
We first warned people about FibreX in 2017 after getting complaints from consumers about the service. One Consumer NZ member told us they’d been close to signing up to a FibreX plan, until the salesperson mentioned they wouldn’t be linking to fibre but to Vodafone’s cable network.