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Telecom to refund 1,300 'misled' customers

Friday 18th June 2010

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Telecom will refund 1,300 customers who may have been misled by a broadband promotion in 2008 after an investigation by the Commerce Commission.

The settlement follows complaints from some that the "Get Telecom Broadband at Dial Up Prices" campaign failed to disclose the true cost and data restrictions of the plan, according to a statement from the commission today.

Telecom will make an inflation-adjusted refund to affected customers for the first month’s rental on its Broadband Basic Plan, costs for installation and equipment and any overcharging, to a total of $120,000. The company will also pay $75,000 to Consumer New Zealand to help establish a telecommunications Price Comparison project, an internet tool to compare prices.

“In the area of new telecommunications, it is easy for consumers to be confused or misled if advertising is not clear as there are many other important details in addition to price, which may influence a consumer’s decision,” said Stuart Wallace, enforcement manager at the commission.

The commission listed seven previous instances where Telecom was either fined or warned over breaches of the Fair Trading Act, dating back to October 2003. The most recent, and biggest, settlement saw the company to pay some $9.5 million for overcharging customers who migrated to broadband between 1999 and 2007.

Shares of Telecom fell 6 cents to $1.86 yesterday and have declined 30% in the past 12 months.

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