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22 September 2016

Trustpower fined for misleading ads

Company has been fined $390,000.

Trustpower has been fined $390,000 after pleading guilty to misleading consumers about a bundled electricity and broadband deal.

The Commerce Commission laid seven charges against the company over ads run between March and July 2015 promoting a $49 monthly price for 12 months on an unlimited data broadband plan. The plan was promoted as part of its “Good things happen when power and broadband get together” campaign.

However, the offer was available only to customers who signed up for power and broadband at the same address on a 24-month contract term. For the second year, the cost of broadband increased to $79 a month.

Customers also faced a $195 exit fee if they wanted to cancel before the 24-month term ended.

The commission’s competition general manager Antonia Horrocks said Trustpower’s marketing misled consumers by promoting the $49 broadband price while keeping important terms hidden in the fine print.

“It’s vital businesses clearly disclose the price and any key conditions when marketing their products so consumers can properly assess the total cost of the service. An artificially low headline price that is subject to significant limits in the small print, including substantial term and exit fee requirements, is likely to be misleading and in breach of the Fair Trading Act,” Ms Horrocks said.

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