Vodafone has paid nearly $270,000 to customers following a Commerce Commission investigation into the company’s "Broadband Lite" promotion.
The investigation stemmed from complaints made by Vodafone customers who believed they’d been misled about the Broadband Lite service or not fully informed of its terms and conditions.
Between July 2009 and September 2011, Vodafone offered the service free to customers for a three-month trial. If they didn’t want to continue with the service, customers had to notify Vodafone before the trial period ended. Customers who didn’t cancel would be billed at $10 a month.
Vodafone undertook to send a text message reminding customers to cancel if they didn’t want to be charged when the free trial finished. But the commission’s investigation found close to 8000 customers didn’t receive this text. It also found around 3000 customers did cancel but were still charged.
Company agrees to a settlement
The company agreed to a settlement with the commission in December, admitting its conduct was likely to have breached the Fair Trading Act. The commission’s Consumer Manager Stuart Wallace said the decision to settle rather than go to court “took into account the fact that Vodafone put things right as soon as it became aware of the problems”.
This isn’t the first time Vodafone has been investigated under the Fair Trading Act. In [our article on the enforcement of the Act], we report the company has received two compliance-advice letters and a warning as a result of investigations in the last three years. In 2012, it was stung with fines close to $1m for misleading promotions run at various times between 2006 and 2009.
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