NZ regulator warns Telecom over anti-competitive behavior

Robert Clark
12 Jan 2010
Daily News

The NZ Commerce Commission (NZCC) has warned Telecom New Zealand over continual breaches of the competition law.

Announcing a NZ$9.5 million ($7.0m) settlement over a misleading broadband promotion offered, the regulator said the incumbent been convicted or warned eight times over its behavior since 2003.

“[T]he Commission is becoming increasingly concerned at the number of occasions on which Telecom has acted in breach of the Fair Trading Act,” NZCC said. “The Commission encourages Telecom to make compliance with the Act a top priority.

In the settlement, Telecom NZ admitted misleading more than 130,000 broadband customers over seven years by continuing to charge them for their dialup services.

The commission said the over-charging had been a result of staff not following the correct steps when upgrading a customer from dial-up to broadband.

“The net effect of Telecom’s error was substantial. A small oversight repeated many times has resulted in a huge level of refunds for customers. Customers trust that businesses will have the correct processes in place and that they will be charged the right price,” said NZCC fair trading Auckland manager Graham Gill.

He noted that Telecom had admitted the error and since March 2007 had had begun refunding customers.

Last month Telecom pleaded guilty to 17 charges of breaching the Fair Trading Act over claims made in 2006 when promoting a new broadband plan. It was fined NZ$500,000.

In a deal brokered by the NZCC in 2006, the carrier returned NZ$3.3 million to customers after a billing fault caused them to be charged twice.

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