Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Freedom Communications fined $8,000

Freedom Communications fined $8,000: cellphone calls advertised at 5 cents a minute cost 99 cents a minute

The Auckland District Court today fined Freedom Communications Limited $8,000 for breaching the Fair Trading Act by advertising cellphone calls at 5 cents a minute but charging 99 cents a minute.

Commerce Commission Chair John Belgrave said that most consumers will have not know that they were overcharged because Freedom sold pre-paid cellphone cards.

Mr Belgrave advised consumers who used Freedom cellphone cards between January 1 and 12 this year, at between 7pm and midnight, to contact the company to have their accounts credited.

Mr Belgrave said that this case was warning to all consumers that use pre-paid cards for cellphones, telephones or Internet services and to the companies that provide pre-paid cards.

"Pre-paid cards can give consumers great convenience, but they require consumers to put a lot of trust in the companies. Consumers receive no bills when they use prepaid cards. They cannot easily check what they are charged and must rely on the companies to charge what was offered.

"It is the companies' responsibility to ensure that they are providing what they claimed they would. If the companies do not, then they risk breaching the Act."

In this case, the company that linked Freedom's services to Telecom's network, Telemedia Networks International Limited, told Freedom on October 31 last year that any work needed before Christmas had to be done soon.

On December 21 Freedom requested Telemedia to do the work needed to reduce Freedom's 7pm to midnight calling rate from 99 cents a minute to five cents a minute, effective from January 1 this year.

On December 24 Telemedia advised Freedom that the work could not be done in time.

Freedom had already booked radio advertising offering the 5c cents a minute rate. The advertising was to start in Auckland, Hamilton, Wellington and Christchurch on January 1. The radio stations required 24 hours notice to cancel the advertisments.

Freedom did not contact the radio stations and ran the advertisements knowing that consumers would be charged 20 times more than the offered rate.

Freedom's advertising stopped on January 13 and the reduced rate was never available.


The Fair Trading Act prohibits false or misleading claims about prices (section 13(g)) and also prohibits any person advertising goods or services when they do not have reasonable grounds to believe that they can supply the goods or services at the advertised price (section 19(1)(b)).

Commission media releases can be viewed on its web site

© Scoop Media

Business Headlines | Sci-Tech Headlines


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Half A Billion Accounts: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>


Half Full: Fonterra Raises Forecast Payout As Global Supply Shrinks

Fonterra Cooperative Group, the dairy processor which will announce annual earnings tomorrow, hiked its forecast payout to farmers by 50 cents per kilogram of milk solids as global supply continues to decline, helping prop up dairy prices. More>>



Meat Trade: Silver Fern Farms Gets Green Light For Shanghai Maling Deal

The government has given the green light for China's Shanghai Maling Aquarius to acquire half of Silver Fern Farms, New Zealand's biggest meat company, with ministers satisfied it will deliver "substantial and identifiable benefit". More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news