Clear faces court action for misleading adverts

Clear faces further court action for misleading advertising

For the second time in less than a year, Clear Communications Limited today pleaded guilty in the North Shore District Court to breaching the Fair Trading Act. Judge Henwood fined Clear $6000 and warned the company that any further offending of this nature would attract a much higher fine.

The charges, laid by the Commerce Commission, related to actions and representations made by Clear through its Clear Net and Ztalk promotions.

This included widespread newspaper advertising of a $24.95 Clear Net business flat rate package that failed to disclose that the offer was not available to certain customers; and television advertising of free Ztalk calls that failed to disclose the offer was only available to new and not current customers.

In November last year, Clear pleaded guilty to five charges of breaching the Fair Trading Act over its national advertising campaign for its internet service, Zfree. It was fined $15,000.

Commerce Commission Director of Fair Trading Deborah Battell said that the irony of this case was that the breaches had been committed while Clear was being investigated by the Commission for its advertising of Zfree.

In sentencing, Judge Henwood said that the case involved a clear breach of the Act. “It is immediately apparent that both advertisements were misleading,” she said.
Background Between September – November 2000, Clear advertised in eight major daily papers and two weekend papers, promoting a $24.95 Business Flat Rate package for particular Clear Net Services. These services included unlimited internet access, mobile messaging, vacation messaging, spam protection, advanced mail forwarding, remote mail access, Clear Paysafe, 3 months domain name hosting and 10 e-mail addresses. The advertisement failed to disclose that the flat rate offer was not available to 0800/0508, ISDN, Connect and Global Roaming customers.

In February and March 2001, Clear promoted Ztalk in advertising on TV3’s coverage of a one-day cricket series. The advertising ran as “pull throughs” (words running across the bottom of the screen while the schedule programme continues) and said “Free national calls every Saturday until 31 March 2001, visit www.Ztalk.co.nz”. The offer, however, was not available to all Ztalk customers, but only to new customers.

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