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TelstraClear guilty of misleading its customers

Media Release

Issued 12 September 2003-04/031


TelstraClear guilty of misleading its customers

TelstraClear was fined $3,000 plus costs in the Auckland District Court yesterday after pleading guilty to breaching the Fair Trading Act in relation to its “Chat ‘n Surf” promotion.

The Commerce Commission alleged that TelstraClear had misled its own customers in the advertising of its Chat ‘n Surf promotion.

TelstraClear’s Chat ‘n Surf offer of 30 hours ‘free’ internet access per month if a minimum of $30 was spent on toll calls was not available to approximately 53,000 of its customers with existing phone line and/or paradise.net plans. The promotion was advertised on television in September last year and aired a total of 86 times nationally.

Commission Acting Chair Paula Rebstock said the terms and conditions of the offer appeared in small print for four seconds towards the end of the advertisement.

“In the Commission’s view, the disclosure of the terms and conditions was inadequate and would not have been seen by viewers.”

“Businesses need to remember to clearly disclose important terms and conditions, especially where these alter the original offer. Failing to do so not only breaches the Fair Trading Act, but may put relationships with existing customers at risk,” she said.

“This is the second time in less than a year that TelstraClear has pleaded guilty to similar charges but the Commission is pleased to note that its prosecutions have prompted TelstraClear to thoroughly review and overhaul its compliance procedures.

“The telecommunications sector as a whole will remain a strategic priority for the Commission and we will be keeping a close watch on the behaviour of all players,” Ms Rebstock added.

Other Information

In February 2003, TelstraClear Limited was fined $5,000 plus costs in the North Shore District Court, having pleaded guilty to misleading its customers as to the nature of a Sky TV promotional offer.

A Commission investigation followed several customer complaints about a promotional flyer and magazine insert that offered all its 30,000 Saturn TV customers an opportunity to subscribe to certain Sky channels. The offer was not, however, available to the approximately 1300 customers who only subscribed to Saturn TV, and required them to sign up to additional phone and/or internet services to be eligible.

See Media Release 2003/117 TelstraClear pleads guilty to misleading Sky TV offer at http://www.comcom.govt.nz/publications/mediarel.cfm

ENDS

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