Customers who got wrong information from Telcos refunded money after Commerce Commisssion took High Court action

A breach of the Fair Trading Act by three telcos has led to a large scale refund to customers.

The total sum is nearly $480,000, and is being paid after the three companies, part of the Vocus Group, were taken to the High Court by the Commerce Commission. 

The commission Chief Executive, Vanessa Horne, says the problem went on for six years.

She says the broadband and power companies CallPlus Services, Orcon and Switch Utilities, trading under the Slingshot and Orcon brands, inadequately disclosed that a fee ranging between $130 to $250 would apply if customers cancelled their fixed-term contracts early.

These fixed-term agreements were secured by door-to-door sales staff or over the phone.

“Under the Fair Trading Act, businesses making uninvited direct sales must clearly disclose the total price and any other consideration in a written copy of the agreement," Horne says.

“These obligations are in place to ensure consumers receive clear and accurate information about the total cost of their services, so they can make an informed decision about what they are signing up to."

The Commission’s investigation found that the fixed-term contracts included a clause stating if customers cancelled their contracts early, a termination fee ‘may apply’. However, the fee amount was not disclosed.

Proceedings were commenced in the High Court in 2021.

It found the amount of the early termination fee should have been disclosed under the Fair Trading Act because it falls under the total price payable and other considerations.

“In total, 4,277 customers had early termination fees applied to their accounts, and 2,636 of those customers paid the fees, a total of $473,688," Horne says. 

The commission says the refund should be done within six months.