The Commerce Commission has issued a warning to NZ Fibre Communications Limited (Stuff Fibre) for making unsubstantiated claims that it is “Probably NZ’s Fastest Internet.”
The Commission’s investigation found Stuff Fibre was likely to have breached the Fair Trading Act because it did not have reasonable grounds for making the claim. Stuff Fibre had not done any broadband speed comparisons with competitors and admitted it did not know if its broadband services were actually faster than its competitors.
The Commission took the view that the caveat “probably” was not effective to prevent customers from being misled.
Commissioner Anna Rawlings said consumers who saw the “Probably NZ’s Fastest Internet” claim were likely to think it meant Stuff Fibre’s broadband was faster than other broadband providers.
“The internet speed claim is a matter of scientific fact that consumers would expect to be known and verified. If a trader is prepared to say it is “probably the fastest”, this will suggest to many consumers that they have done their research and are comfortable they are performing at that level. In fact, Stuff Fibre had not verified its claim.”
“Traders need to remember a claim is unsubstantiated if they do not have reasonable grounds to make the claim at the time they make it - irrespective of whether the claim is false or misleading,” she said.
In September this year heat pump supplier Fujitsu General New Zealand Limited was the first company convicted and fined under the unsubstantiated representations provision of the Fair Trading Act. Two months later solar panel systems retailer New Zealand Home Services Limited (NZHS) was warned over the claims it made about the financial benefits of its solar panel installations. In 2015 the Commission issued a warning to Baa Baa Beads after it failed to substantiate its claims about the therapeutic benefits of its Baltic amber products, including those promoted for treating teething babies.
A copy of the Stuff Fibre warning can be found on our Enforcement Response Register.