Telecom convicted for breaching the Fair Trading Act

$4,000 fine for 'inadvertent technical fault'

A technical glitch which meant callers to a Telecom run information line weren't informed of charges over a four month period has cost the company $4,000.

The Commerce Commission says it has won a case against Telecom for breaching the Fair Trading Act by not telling people of a 12 cents a minute charge levied on calls to the Environment Canterbury (Ecan) River and Flood information line.

Christchurch district court Judge Murray Abbott fined Telecom $4,000 for breaching the act and ordered the telco to pay $1,500 towards the commission's cost as well as $130 in court fees. Abbot found that Telecom had "engaged in misleading conduct by failing to advise the public, in either the phone directory or at the start of the call itself, that calls to the Ecan infoline attracted a charge."

The commission was acting on a complaint from a member of the public when it took Telecom to court. It found that the announcement that calls to the Econ Infoline cost money had been missing for approximately four months. During this period, over 10,000 calls were made to the Infoline, according to commission chair Paula Rebstock.

Originally, the commission offered to settle the case out of court if Telecom admitted it had breached the Fair Trading Act and compensated affected customers. However, Telecom declined to do so. Telecom's manager of government and industry relations John Goulter says the issue was caused by an "inadvertent technical fault" and the telco felt it had a strong defence and decided to contest the case instead.

Goulter says Telecom won't appeal the conviction and says the telco will move on instead. "The case serves as another reminder that Telecom must take its legal responsibilities seriously," Goulter says and adds that while there are no formal consequences for the company beyond the court fine, the case has "damaged the brand" for Telecom.

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