Vodafone fined $400k for misleading NZ users

Vodafone’s operation in New Zealand has been fined just over NZ$400,000 (US$330,000) by the Auckland District Court after pleading guilty to a breach of the country’s Fair Trading Act. The breach related to advertising and marketing collateral for the firm’s Live! mobile portal, which led users to believe that mobile internet services would be free of charge. In fact only content and services within the Live! walled garden were free to use.

The case was the first of six brought against Vodafone by the Commerce Commission to reach court. Each case deals with allegations of misleading fixed and mobile promotions by the UK-headquartered carrier between 2006 and 2009. Vodafone is defending the five remaining cases.

The confusion around Vodafone Live! was exacerbated by the fact that the Live! banner remained on the handset screen in some cases, even when the user had browsed beyond the Vodafone portal, the Commission said. Customers were charged NZ$11.45/MB to browse outside of the portal, with an average song download costing NZ$45. One complainant was charged NZ$1,300, the Commission said.

“No-one, rich or poor, should ever have to pay what, properly pre-warned, they could avoid paying,” said Judge Roderick Joyce, levying the fine on Vodafone. He went on to say that he was not convinced the problem was caused by technical oversight, adding that it was “extraordinary that a concern like Vodafone fell down in such an elementary way.”

Competition Commission manager Stuart Wallace said: ““It is unclear just how many customers were affected, as Vodafone did not keep detailed records of complaints. But Vodafone has agreed that it was likely to have involved significant numbers of its customers and large amounts of money. This was a serious design flaw which resulted in many customers incurring unwanted costs.”