Vodafone $1 a day for 10MB in court

Forums › One New Zealand (including Vodafone, WxC, Farmside) › Vodafone $1 a day for 10MB in court

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195 posts

Master Geek

#527106 29-Sep-2011 10:30

dejadeadnz:
networkn: /me sighs at joker97

If you simply read some of the other posts the answer to your question would be perfectly clear. It's because in the HEADLINE of their ad's they do NOT say they will charge you as you go, there is NO premise of pro-rata billing.

Have a read of nyquists posts, they are as clear as anyone could possibly make them, as and far as I am concerned make the situation crystal clear.

Agreed. There's no helping some people. Frankly, there's an unfortunate element within the so called geek world which prides itself on doing anything to whip up a superiority complex and to laugh at the plight of the so called dumb, i.e. less technically advanced.

Some of the people who vehemently defend VF here fall into that exact category. "OH I know that when you purchase data it's normally not charged pro rata and it's $x for Y amount and data and if you don't use it all up too bad. Shame on you and don't complain. Hahahahah". There is little appreciation for issues of information assymetry between the trader and the average user, nor the need to compel straightforward and easily understandable advertising messages to promote efficiency in the markets.

Be mindful of another potential category: It is easy to presume all posters come from a position of neutrality. One poster has kindly indicated his bias to Vodafone, how many posters have undeclared bias? While Vodafone is not overtly presenting itself here, indeed conspicuoous by their absence, (I bet they are reading this though) there can be no assumption they are not covertly represented here. Could that also potentially explain why some might still be "...defending the indefensible."?

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networkn

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#527110 29-Sep-2011 10:40

Well I don't think the loudest defenders are VF in this particular thread. I believe personally it has more to do with what people consider to be "obvious" which only takes into account what would be obvious to the technical community. I asked my wife (a doctor) and she thought it was misleading, and I have asked since, an architect, dentist, and my admin manager, all of them agreed it was misleading.

stevenz

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#527168 29-Sep-2011 12:42

Is there any bottom limit to what triggers the data usage? So hypothetically, if my phone loses wifi connection for a few seconds and switches to mobile data & polls the server pulling in ~1Kb of data, does that suddenly trigger the $1 charge? I'm always hesitant to let anyone who doesn't need data have ANY APN's enabled (even MMS) in case they get hit with an unexpected $30 or so for the month.

The description from VF does seem pretty obvious to me however, I certainly wouldn't expect a partial refund if I'd only used 2MB of the 10MB limit.

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dejadeadnz

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#527170 29-Sep-2011 12:43

I am inclined to agree with Networkn. FWIW, for those who think that this decision will impose unreasonable compliance costs or burdens on traders, here's a brief overview of how responsible/sensible commercial entities would vet advertising involving technical claims. This is coming from personal experience in having vetted ads for FTA compliance.

1. Marketing team/external agencies will come up with a brief as to what elements about the product they'll focus on.

2. Technical people will be briefed on proposed focus and will be tasked with making sure that the claims made are verifiable and/or can be technically delivered upon.

3. Lawyers/regulatory/risk management people will liaise with both of the above to verify that there's the necessary alignment between 1 and 2 and that no unintended errors get introduced along the way.

If these simple steps are followed and people stick with the "Verify that every claim made is true/can be backed up" principle, it's pretty hard to get into trouble. VF should frankly look hard at its own people.

Stevenz: For the last time, the issue isn't with people unreasonably expecting a partial refund. Please read the whole thread properly before commenting.

stevenz

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#527177 29-Sep-2011 12:50

dejadeadnz: Stevenz: For the last time, the issue isn't with people unreasonably expecting a partial refund. Please read the whole thread properly before commenting.

I had. Apparently I need better reading comprehension skills as I understood that to be at least part of the issue.

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networkn

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#527179 29-Sep-2011 12:51

stevenz: Is there any bottom limit to what triggers the data usage? So hypothetically, if my phone loses wifi connection for a few seconds and switches to mobile data & polls the server pulling in ~1Kb of data, does that suddenly trigger the $1 charge? I'm always hesitant to let anyone who doesn't need data have ANY APN's enabled (even MMS) in case they get hit with an unexpected $30 or so for the month.

The description from VF does seem pretty obvious to me however, I certainly wouldn't expect a partial refund if I'd only used 2MB of the 10MB limit.

Yes ANY Mobile DATA attracts the $1 (or part thereof)

Hinko

195 posts

Master Geek

#527180 29-Sep-2011 12:52

VF should frankly look hard at its own people.

Is the problem their people - or their strategic goals and / or their culture?

People generally start off being good and honest.

What strategic direction does VF suggest / seek / guide / demand from its people?

NonprayingMantis

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#527192 29-Sep-2011 13:01

stevenz:
dejadeadnz: Stevenz: For the last time, the issue isn't with people unreasonably expecting a partial refund. Please read the whole thread properly before commenting.

I had. Apparently I need better reading comprehension skills as I understood that to be at least part of the issue.

no, it's not about expecting a partial refund. It's about people not expecting to be charged a whole $1 in the first place from only using 200KB of the 10MB. When voda says "only pay for what you use" that implies very strongly that the charging will be prorated. Had Voda said something like "activate data on your mobile for $1 each day and use up to 10MB that day" then it would be fine. the upfront charge would be clear.

the actual charging mechanism isn't the issue here, (as others have stated, Telecom have an identical $1 a day' plan). The issue it is the that vodafone stated that people would only pay for what they use, and this misleads customers into thinking their charging would be prorated (1MB for 10c, 100kb for 1c etc), when in fact that didn't happen.

Hinko

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Master Geek

#529989 6-Oct-2011 11:44

"Vodafone paid a dividend of $130 million, or 84 cents per share, to its British parent, nearly triple the $47 million it paid last year."

When one considers the context and potential for reasonableness of the Vodafone casual and plan charges.... I think that statement expresses the position far better than any of my words could.

{Quote from http://www.nzherald.co.nz/technology/news/article.cfm?c_id=5&objectid=10756948 }

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#547902 21-Nov-2011 15:34

And the sentence:

Vodafone New Zealand Limited was fined $81,900 in the Auckland District Court today after being found guilty of breaching the Fair Trading Act in relation to its $1 a day mobile phone internet data charges.

In sentencing, Judge Kiernan said that although Vodafone’s behaviour wasn’t reckless, it was at the higher level of carelessness and inadvertence given that they were one of the market leaders in providing mobile phone internet services at the time.

Between July and November 2008, Vodafone introduced and promoted a new casual data rate of $1 a day ($1 a day charge) with the maximum allowance of 10MB (megabytes) of data per day, for its mobile phone internet service. The Vodafone website said, “If you use less than $1 worth of data in a day, we’ll only charge for what you used.”

However, Vodafone failed to give customers any information about how the $1 a day charge was calculated. They also failed to inform customers that they would incur the full charge of $1 if they used as little as 204.8KB (approximately 2%) of the 10MB allowance. This lack of information led some customers to form a mistaken belief about how the $1 a day charge was calculated. For example, some customers believed that the charge was proportional to the amount of data that they used below 10MB, meaning that if they used 1MB, they expected to pay 0.10 cents and if they used 5MB, they expected to pay 0.50 cents.

“At the time, accessing the internet on your mobile phone was a relatively new service within the telecommunications arena,” said Commerce Commission Competition Manager Stuart Wallace. “Even so, providers need to be certain that their marketing and promotions do not mislead consumers, who often have no way of easily verifying the claims being made.”

“Representations made about price are especially important to consumers.”

The $1 a day charge was Vodafone’s second casual data pricing regime following Vodafone Live! Pre-pay users make up the majority of Vodafone’s 2.4 million customers. The $1 a day pricing regime affected both Pre-pay customers and all those customers who did not have an On Account data plan.

This was the second of six cases to reach Court that involves the Commerce Commission and Vodafone. Each of the cases relates to alleged misleading mobile broadband or mobile phone promotions by Vodafone between 2006 and 2009. Vodafone pleaded guilty to the first charge, which related to the Vodafone Live! mobile phone internet service, and was fined over $400,000. Vodafone is defending the remaining charges.

You can view a copy of the Judge’s reserved decision on the Commission’s website at: www.comcom.govt.nz/fair-trading-enforcement-outcomes

Background
The Commission laid charges against Vodafone in September 2009 for alleged breaches of the Fair Trading Act in relation to various broadband and mobile phone promotions.

Vodafone pleaded guilty to the first charge, which related to the Vodafone Live! mobile phone internet service, and was fined over $400,000. For more information, visit:
http://www.comcom.govt.nz/media-releases/detail/2011/vodafone-guilty-of-misleading-vodafone-live-customers-fined-400k/

In addition to the $1 a day issue, the following charges relating to various representations made by Vodafone remain before the Court:
• the extent of the coverage of Vodafone’s 3G mobile broadband service, made in Vodafone’s ‘broadband everywhere’ marketing campaign between October 2006 and April 2008
• the availability of a $10 free airtime credit for those customers who registered their details on Vodafone’s website between May 2007 and September 2008
• the comparative size of Vodafone’s mobile phone network between September 2008 and February 2009
• the price of a Sony Ericsson W200i mobile phone between July and August 2007.

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#547920 21-Nov-2011 16:04

Isn't about time that ComCom started fining these companies as a % of their revenue rather than these pathetic figures? Vodafone would spend more than $82k a year on paper clips

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ahmad

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#547927 21-Nov-2011 16:16

Ironically I have no issue with the way that VF billed up to the $1. Perhaps the issue was that they didn't have the information easily available but does it really matter than the $1 is charged after using only 200kb?

My bigger concern, which the CC failed to address, was the fact that 10Mb usage in a day is frankly pathetic and how can it be called "$1 per day" when that implies that it's enough for a day's usage?

NonprayingMantis

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#547958 21-Nov-2011 17:02

ahmad: Ironically I have no issue with the way that VF billed up to the $1. Perhaps the issue was that they didn't have the information easily available but does it really matter than the $1 is charged after using only 200kb?

My bigger concern, which the CC failed to address, was the fact that 10Mb usage in a day is frankly pathetic and how can it be called "$1 per day" when that implies that it's enough for a day's usage?

10MB/day is plenty big enough for the vast majority of feature phone users – which is who this plan was aimed at.

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#547963 21-Nov-2011 17:11

NonprayingMantis:
ahmad: Ironically I have no issue with the way that VF billed up to the $1. Perhaps the issue was that they didn't have the information easily available but does it really matter than the $1 is charged after using only 200kb?

My bigger concern, which the CC failed to address, was the fact that 10Mb usage in a day is frankly pathetic and how can it be called "$1 per day" when that implies that it's enough for a day's usage?

10MB/day is plenty big enough for the vast majority of feature phone users ? which is who this plan was aimed at.

Really? You can't own an iphone then, because 10 MB doesn't go anywhere, unless you are just checking email, and even then viewing photo attachments are likely to be more than that.

NonprayingMantis

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#547966 21-Nov-2011 17:14

mattwnz:
NonprayingMantis:
ahmad: Ironically I have no issue with the way that VF billed up to the $1. Perhaps the issue was that they didn't have the information easily available but does it really matter than the $1 is charged after using only 200kb?

My bigger concern, which the CC failed to address, was the fact that 10Mb usage in a day is frankly pathetic and how can it be called "$1 per day" when that implies that it's enough for a day's usage?

10MB/day is plenty big enough for the vast majority of feature phone users ? which is who this plan was aimed at.

Really? You can't own an iphone then, because 10 MB doesn't go anywhere, unless you are just checking email, and even then viewing photo attachments are likely to be more than that.

see bolded part of my post. $1/day wasn't aimed at smartphone users. they should be on a plan. It was aimed at people who have very occiasional mobile internet use on non-smartphones aka feature phones.

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