Trustpower has been fined $390,000 for misleading consumers about a bundled broadband and electricity supply offer. The company pleaded guilty to an action in the Auckland District Court brought against it by the Commerce Commission over a promotion it ran between March and July 2015.
Competition general manager Antonia Horrocks said Trustpower’s marketing misled consumers by keeping important terms hidden in small print.
It is the commission’s second successful action this month against a telco for misleading advertising. Earlier Vodafone was fined $165,000 for its mobile plan adverts.
The Commission said: “The Trustpower campaign advertised a 12-month unlimited data broadband plan for $49 per month, but that price was only available to customers who signed up for power and broadband at the same address on a 24-month contract term, and the plan would cost up to $79 per month in the second twelve months.”
Customers were also required to pay a $195 exit fee if they wanted to cancel the contract in the 24-month period.
Horrocks said: "An artificially low headline price that is subject to significant limits in the small print, including substantial term and exit fee requirements, is likely to be misleading and in breach of the Fair Trading Act.
"This type of advertising is of particular concern to the Commission as the misleading headline price can attract customers away from traders who advertise their prices clearly and fairly." According to the commission, Trustpower’s offer attracted 8,000 customers.