By Dan Satherley
Vodafone has been fined over $400,000 after misleading customers into thinking they had free mobile internet, when they didn't.
Last month the company pleaded guilty to five charges under the Fair Trading Act brought by the Commerce Commission, and this morning was fined $402,375 plus costs in the Auckland District Court.
The problems stems from a mobile broadband promotion which promised Vodafone Live customers "absolutely free" internet use. Advertising also included the phrases "completey free" and "you won't be charged".
It turns out these claims only applied to certain websites inside the Vodafone Live 'walled garden', and everything else was charged at $11.25 a megabyte (to put this into perspective, a typical mp3 is about 4mb, and would have cost upwards of $40 to download).
Vodafone lawyer Bruce Gray QC said some phones displayed the Vodafone Live banner even when users were not inside the walled garden, leading to users' confusion.
The judge expressed surprise that Vodafone was not aware of this problem.
“I was not persuaded that to describe the problem as being one of 'technical oversight' was duly to recognise the level of mismanagement," says Judge Roderick Joyce. "It is extraordinary that a concern like Vodafone fell down in such an elementary way."
"If Vodafone had thought of that, we wouldn't be here," said Vodafone's lawyer Bruce Gray QC.
Some customers racked up bills in the thousands of dollars without realising it, and were "fobbed off" by the company's call centre, says Commerce Commission lawyer Nick Flanagan.
“It is unclear just how many customers were affected, as Vodafone did not keep detailed records of complaints," says the commission's Stuart Wallace, "but Vodafone has agreed that it was likely to have involved significant numbers of its customers and large amounts of money. This was a serious design flaw which resulted in many customers incurring unwanted costs. "
Vodafone was first alerted to the issue in 2007, but in 2008 had taken no steps to remedy the issue, prompting the Commerce Commission to lay charges.
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