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507 posts

Ultimate Geek

#56102 12-Jan-2010 12:23
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"Since 2003 Telecom has 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."

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 packages and the charges for broadband. The issues had been settled both in and out of court.

No surprises here eh?  This behemoth of NZ communications continues to thumb its nose at the act, as seen with the new "all you can eat" plan.


The force is strong with this one!

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BDFL - Memuneh
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  #289253 12-Jan-2010 12:29
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Here's the official release from the ComCom:

In a settlement with the Commerce Commission, Telecom New Zealand Limited and Xtra Limited (Telecom) has admitted breaching the Fair Trading Act by misleading more than 130,000 broadband customers.

In 1999 Telecom introduced a broadband internet service. It offered its existing dial-up customers the opportunity to migrate to broadband, although these customers would continue to have a dial-up connection, but would not be charged.  Telecom intended that no monthly account charge would apply for the dial-up connection and customers would only be charged for usage.

Between 1999 and 2006, due to a number of administrative errors, Telecom customers who took up the advertised offer continued to be billed monthly account charges for dial-up, resulting in an over-charge to these customers in excess of $9.5 million. This was caused by Telecom staff not following the correct steps when changing a customer from dial-up to broadband.

Telecom admitted it had breached the Fair Trading Act by sending customers invoices which contained a false representation as to the price those customers had to pay for internet services, by including the monthly account charges for dial-up.

From March 2007 Telecom began refunding more than 130,000 affected customers and writing to all those customers to advise them of the error.

“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. Although we encourage consumers to check their monthly statement, businesses should get it right,” said Commerce Commission Fair Trading Auckland Manager Graham Gill.

“Telecom has cooperated with the Commission’s investigation and undertaken a costly internal exercise to proactively refund all affected customers. They have also agreed as part of this settlement to introduce procedures to prevent a repeat of this sort of failure,” said Mr Gill.

“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 Telecom has 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.”

Around 1400 affected customers have not been able to be traced by Telecom to receive their refunds, although the credit has been applied to their inactive account. Any customer who believes they may be entitled to a refund should contact Telecom.

Note that Telecom have started refunding customers in 2007, and out of 130,000 only 1,400 customers have not been contacted - inactive accounts received the credit but the customers were not found.

Not so bad when you read the story, then?

507 posts

Ultimate Geek

  #289268 12-Jan-2010 13:00
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Definately an admirable effort by telecom in making amends.

But would it not have been better not to mislead? but wait they wouldnt have acquired all those new customers!!


The force is strong with this one!


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  #289275 12-Jan-2010 13:38
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Have you read the Fair Trading Act, theres ALOT of pages.. very hard to remember everything ;)

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Master Geek


  #289310 12-Jan-2010 16:04
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It seems to me what happend here was customers were migrated to broadband and a billing system error did not pick up that they were still being charged for dial up.

Telecom should not be blamed for misleading customers they should be blamed for having crappy billing systems that should have been updated a long long time ago.

Any views expressed here are my own and do not necessarily represent the views of my employer Telecom NZ

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  #289388 12-Jan-2010 19:28
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Here's a interesting timeline

In October 1999, Theresa Gattung took over from Rod Deane as Telecom's CEO...On February 2, 2007, Gattung announced that she would leave Telecom at the end of June 2007.

ComCom charges date between 1999 and 2006


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