Vodafone was fined $350,000 in Auckland District Court today following our guilty plea in February 2019 for breaches of the Fair Trading Act. The breaches related to billing errors which occurred between 2012 and 2018, made when customers gave advance notice about terminating their services.
Vodafone CEO, Jason Paris, says, “Every customer deserves an accurate bill every month. We clearly fell well short of that in this instance, and for that I apologise. If you get it wrong, you should put your hand up, acknowledge it, and make it right.”
The billing error arose for a proportion of customers who had a new billing cycle start within their notice period of termination. In these cases, an invoice was generated for another full month, rather than pro-rated for the number of days remaining in the notice period. As a result, some customers overpaid us. On average, affected customers were over-charged by $9.70 each.
Vodafone has applied credits to the accounts of all current and former customers affected by the error and we have undertaken an extensive programme to contact and reimburse them. In cases where we’ve been unable to locate customers, we have donated the equivalent of their unclaimed credit balances to charity via the Vodafone New Zealand Foundation. Notwithstanding this donation, any customer who we have been unable to contact who has an outstanding credit will be refunded if they get in touch with us.
In making its ruling, the Court took into account the fact that Vodafone had co-operated with the Commerce Commission throughout their investigation, as well as Vodafone’s guilty plea and remediation efforts.
“I want to reassure customers Vodafone has not profited in any way from these historical billing errors, and we have subsequently invested significant time and money into improving our systems and processes to prevent a recurrence,” says Paris.
This issue resulted in
29,425 customers being overcharged a total of $285,359.37
between January 2012 and December 2018 and occurred due to a
combination of unintentional system and human errors which
Vodafone has resolved.