Thursday, 23 May 2019 10:37

Spark warned of ‘likely’ law breach on broadband pricing notification Featured

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Spark warned of ‘likely’ law breach on broadband pricing notification Image Stuart Miles at FreeDigitalPhotos.net

New Zealand competition regulator, The Commerce Commission, has warned the country’s largest telco, Spark, over likely breaching of thelaw in a notification to customers on broadband prices rises.

The warning follows an investigation into representations Spark made on its website and in emails in August and September 2018, notifying in-contract customers receiving its copper-based broadband service of its decision to increase the price by $5 a month.

The Commission said in a statement issued on Thursday that in its notification to customers, Spark’s contractual terms and conditions stated that they would not change the monthly charge for in-contract customers “without either gaining the customers’ consent or giving them the option to cancel their contract without early termination fees”.

“However, when Spark notified customers of the price rise on its website and in email communications, Spark focused solely on the $5 a month price increase and did not explain that if customers did not consent to the price rise they had the right to terminate their contract without penalty,” the Commission said.

Commissioner Anna Rawlings says in the Commission’s view, Spark has likely breached the Fair Trading Act by making false or misleading representations about the existence or effect of its customers’ rights when it notified them of the price rise.

“In the Commission’s view, customers reading Spark’s notification of the price rise would have assumed that Spark had a right to increase price without discussing it with the customer and that the customer had no choice but to accept the price increase," she said.

“In fact, customers who did not agree to the price rise, could terminate the contract without incurring an early termination fee and could take up a more acceptable offer elsewhere if they wanted to.

“When communicating with customers about price increases, businesses need to clearly and accurately represent any contractual rights customers may have if they do not accept the price increase. Businesses must not create the impression that prices can be unilaterally increased if that is not permitted by the contract, or if consumers are not bound to accept the increase,” Rawlings cautioned.

The Commission says Spark has responded to the Commission’s inquiries by updating information on its website and sending updated information to customers affected by the price rise.

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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