Thursday 22 September 2016 03:50 PM
Trustpower fined $390,000 after pleading guilty to misleading broadband users
By Sophie Boot
Sept. 22 (BusinessDesk) - Trustpower has been fined $390,000 after pleading guilty in the Auckland District Court to
misleading consumers over a broadband offer.
The Commerce Commission filed seven charges under the Fair Trading Act last month over a promotion the power company ran
between March and July 2015, which attracted about 8,000 customers to an unlimited data broadband plans, the regulator
said in a statement.
The Trustpower campaign advertised a 12-month unlimited data broadband plan for $49 per month, but that price was only
available to customers who signed up for power and broadband at the same address on a 24-month contract term, and the
plan would cost up to $79 per month in the second twelve months. Customers would also have to pay a $195 exit fee if
they wanted to cancel the contract in the 24-month period.
Competition general manager Antonia Horrocks said Trustpower’s marketing misled consumers by keeping important terms
hidden in small print.
“It’s vital businesses clearly disclose the price and any key conditions when marketing their products so consumers can
properly assess the total cost of the service," Horrocks said. "An artificially low headline price that is subject to
significant limits in the small print, including substantial term and exit fee requirements, is likely to be misleading
and in breach of the Fair Trading Act.
"This type of advertising is of particular concern to the Commission as the misleading headline price can attract
customers away from traders who advertise their prices clearly and fairly."
Trustpower was last fined for breaching the Fair Trading Act in 2009 when it had to pay $17,000 for misleading its
customers about the nature of a power bill review service.
The shares last traded at $7.75, and have fallen 0.6 percent this year