Vodafone has been fined nearly $82,000 after being found guilty of breaching the Fair Trading Act.
The company was fined $81,900 after Judge Kiernan found that its $1 a day mobile phone internet data charges breached the Act.
The $1-a-day rate, which Vodafone introduced between July and November 2008, promoted a maximum allowance of 10MB a day for mobile phone internet. The company’s 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 fully inform customers about how the $1 charge was calculated, and also neglected to inform them that the full charge of $1 would be incurred if as little as two percent of the 10MB was used.
Some customers believed the fee was charged proportionally to the amount of data used, so if they used 1MB they would be charged only 10c.
Commerce Commission Competition Manager Stuart Wallace says at the time of the promotion, mobile phone internet access was a relatively new service.
“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,” he said.
“Representations made about price are especially important to consumers.”
The judge said while Vodafone’s behaviour wasn’t reckless, it was at the higher level of carelessness and inadvertence due to the company’s position as a market leader.
This was the second of six cases to reach court that involve the Commerce Commission and Vodafone – all relate to alleged misleading mobile broadband or mobile phone promotions by Vodafone between 2006 and 2009.
Vodafone was fined $400,000 after pleading guilty to the first charge, and is defending the remaining charges.
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