Spark issues refunds after 'misleading' 113,000 broadband customers

Source: 1News

Spark New Zealand is in the process of issuing refunds for 113,000 customers after they were charged for an unnecessary wire maintenance service over six years.

Computer (file photo).

Between 2014 and early 2021, Spark NZ charged more than 400 wireless broadband customers and around 112,600 fibre connection customers for the wire maintenance service, even though most would have no need for it, the Commerce Commission said.

The Commission began investigating the telecommunications company in 2020 following a consumer complaint.

Spark has since refunded around $15 million to customers with a remaining $348,757.93 still to be refunded to 4921 customers.

The company collected around $15.7 million in fees for the service from the affected customers over the six-year period.

Commission chairwoman Anna Rawlings said Spark’s conduct “likely breached the Fair Trading Act” and “created an impression through its website that a wire maintenance service was suitable for all connection types when it was not”.

It also made “misleading representations through invoicing its customers for the service that would be of no use or benefit”, she said.

“This highlights the need for businesses to have the right systems and processes in place, so customers are charged only for the services they need, can use, or benefit from.

“Customers must be able to rely on information businesses provide to them when they are buying, contracting or being invoiced for services.”

Rawlings added that businesses “should not be charging customers for services that they don’t need or have no use for, or services that they cannot practically benefit from”.

“If extra services or costs are charged, businesses must ensure that information about them is clearly disclosed to customers and is accurate, complete and easy to understand.”

Spark has since stopped selling the service to wireless and fibre connection customers, and is voluntarily refunding all wire maintenance service fees paid for by customers.

System fixes and processes will also be put in place to prevent the wire maintenance service being offered to the affected customers in the future.