Vodafone sentencing sends strong message

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Vodafone sentencing sends strong message

3News NZ

Vodafone has been fined almost $1 million

Vodafone has been fined almost $1 million

By Sanele Chadwick

Vodafone New Zealand has been fined $960,000 this morning after being found guilty of breaching the Fair Trading Act.

The penalty comes after the company was charged close to half a million dollars last year for other fair trading breaches.

The company was found guilty on 21 representative charges of breaching the Fair Trading Act and it now has to pay more than $1.4 million in total – the highest penalty imposed on a single defendant under the Fair Trading Act in one go.

The Commerce Commission says they’re happy with the sentence.

“These were significant penalties, in terms of the Fair Trading Act context, so the commission is pleased with the penalties that the court has agreed to,” says the Commerce Commission’s competition branch manager Stuart Wallace.

Today’s charges were in relation to advertising campaigns run by Vodafone from October 2006 and February 2009 which mislead customers.

In sentencing, Judge Harvey described Vodafone’s conduct as “gross carelessness” and was particularly damning of Vodafone’s 'Broadband Everywhere' campaign.

Vodafone also claimed it had the largest 3G network in the country, when in fact Telecom did in terms of geographical reach.

“Telecommunications is a very competitive industry, as I think the judge noticed. So companies are always on the lookout to get a marketing edge. I think they understand now that those marketing messages are clear and not misleading,” says Mr Wallace.

Vodafone wouldn't appear on camera today but issued a statement saying it accepts the penalty sought by the Commerce Commission.

It says it got things wrong, and admits it didn't communicate clearly enough with their customers.

Consumer New Zealand hopes this latest sentencing will send a strong message for companies to take the Fair Trading Act seriously.

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Comments

12/09/2012 10:45:31 a.m.

Mike wrote:

@Annikki but look at how much those rates have come down!

Even in a city your looking at basically towards $40 a month for a broadband package where a few years ago you paid more like $60 for less speed and less data.

Even the ultra-speed broadband for schools, by getting optical to rural schools, we now have affordable high-speed broadband where they had dial-up speed before.

Sure, Ultra-speed still too expensive, as a school may be looking at like $11K a year for ultra-speed which is too expensive. But then dont spend the $11K and pick the slower broadband for around $50/month for 12 months = $600'ish and get near top end broadband performance with the optical lines. Compare that to dial-up speeds before the optical laid.

By getting optical lines to so many rural areas, it has also improved rural speeds genrally, and reduced costs.

Could the costs do with coming down more? Sure. But the change has been a positive change, and shown improvement.

12/09/2012 9:46:54 a.m.

annikki wrote:

Vodafone gets punished for misleading advertising. But what about a government that promised fast broadband access to the NZ rural communities?? Unfortunately in the area where I live the only acceptable provider is Telecom which exploit their market position with (to my oppinion) unfair high charges, 2 GB NZ $50/month!!!

11/09/2012 2:58:31 a.m.

dennis wrote:

Vodafone made the comment last month when they decided to charge every customer who doesn't pay on their due date $10 a month, the one area that they did have as moral advantage over competitors.

10/09/2012 7:18:08 p.m.

Jim Seaview wrote:

QUOTE: "“Telecommunications is a very competitive industry, as I think the judge noticed. So companies are always on the lookout to get a marketing edge. I think they understand now that those marketing messages are clear and not misleading,” says Mr Wallace. What a great result for our Commerce Commission - congratulations as this fine should send a message to all those who call themselves 'Marketing Managers" to Just tell the Truth!!! How hard is that to ask????? Do you need another degree????? The public is fed up and also sick and tired of plain old 'corporate lies'.