Lessons for businesses dealing with consumers – Consumer Lawyer Auckland - Dukesons Business Law
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Lessons for businesses dealing with consumers – warnings by Commerce Commission
The Commerce Commission has sent warning letters to four telecommunication companies about specific conduct that the Commission considers breached the Fair Trading Act. Telcos will be under particular scrutiny but there are lessons here for all traders. Any consumer lawyer would advise clients to say what they mean, mean what they say, do this clearly, and with full and prominent disclosure of terms. It isn't only potential liability that should be of concern – adverse publicity can be extremely damaging.
In the Commission’s view, the companies that were warned are likely to have breached the Fair Trading Act by engaging certain conduct. I’ve included below conduct identified by the Commission that could perhaps apply to a wide range of traders.
- Incorrect representations as to consumers’ rights of cancellation under the uninvited direct sales provisions of the Fair Trading Act
- Making misleading representations about the price of its one of its services, by not identifying or inadequately disclosing additional costs
- Making misleading representations as to the cost of a service when, in order to receive “free” goods or services, the consumer was required to pay additional fees or to take additional services.
The Commission has taken a number of prosecutions or actions against telecommunication companies in recent years, including:
- Trustpower was fined $390,000 in September 2016 for misleading consumers over the price and terms of its bundled electricity and unlimited data broadband offer.
- Also in September 2016, Vodafone was fined $165,000 for false price representations on invoices for its ‘Red Essentials’ mobile plan.
- Vodafone reached a $268,000 settlement with the Commission in January 2014, over the promotion of its ‘Broadband Lite’ service.
- Call Plus Services Limited (trading as Slingshot) was fined $250,000 in December 2013 over the telemarketing of its services.
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