Spark forced to reimburse 113,000 customers after charging them for unnecessary service

New Zealand

The Spark must reimburse nearly $15.5 million to nearly 113,000 people. Photo/NZME

Spark received a Commerce Commission warning and was ordered to refund nearly 113,000 customers totaling more than $15 million after some were charged for a service they didn’t need or needed. could not benefit.

In a statement, the Commerce Commission said that between 2014 and early 2021, Spark billed more than 400 wireless broadband customers and approximately 112,600 fiber-connected customers for cable maintenance service, although most wouldn’t need it.

The telephone company collected approximately $15.7 million in fees for service from these customers over the six-year period.

The commission began investigating Spark New Zealand Trading Limited (Spark) in 2020 following a consumer complaint.

So far, Spark has already refunded around $15 million to customers. The remaining $348,757.93 still needs to be refunded to 4,921 customers, with 1,223 former customers each eligible to receive more than $100 in refunds.

Commerce Commission Chairman Anna Rawlings said Spark’s conduct gave the impression on its website that a cable maintenance service was suitable for all connection types when it was not. not, and made misleading statements by charging its customers for the service which would be of no use or benefit.

Rawley claims it likely violated the Fair Trading Act.

“Companies should not charge customers for services they do not need or need, or for services they cannot afford. If additional services or costs are charged, companies 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 fiber connection customers.

In a statement, Spark product manager Tessa Tierney said the maintenance was initially implemented for customers with copper cabling and, in recent years, has also been available to fiber customers.

“Although some of these customers benefited from the service, it was not applicable for the majority, so in 2020 we stopped offering cable maintenance on fiber connections and proactively removed the service on current fiber connections,” Tierney said.

Tierney added that a small number of wireless broadband customers have been charged for wire maintenance service due to separate historical system errors.

“We recognize that this does not meet the high standards of product stewardship that our fiber and wireless customers expect and deserve, and we apologize to anyone affected. We are committed to improving our systems and processes to ensure this does not happen. reproduce more.”

Spark urges ex-customers to check if they are among the many who owe a share of the $15 million, as some ex-customers may have changed their contact information since joining Spark, and they may not have received the communication and instructions on how to claim their refund.

Former Spark customers who paid for wire maintenance while on a fiber or wireless connection and have not yet requested their refund can go to spark.co.nz/accountrefund.

Spark also said unclaimed refunds under $100 will go to one or more recognized charities, but customers will have the option to claim their refund from Spark at any time after the date of the donation.

This isn’t the first time Spark has been investigated for a potential violation of the Fair Trading Act.

In 2019, he was sued and fined $675,000 for making false or misleading statements in billing his customers and for offering $100 of credit to new customers.

They were also warned in 2017 for misleading advertising and making unsubstantiated claims about the impending shutdown of a competitor’s network.

They received another warning in 2019 for misleading contract customers about an increase in broadband prices, making unsubstantiated claims about the speeds consumers would receive from portable Wi-Fi devices, and false statements on the price of SIM cards, and failed to correctly apply a $300 welcome credit to eligible customer accounts.

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