Telecom giant Spark has been warned by the Commerce Commission after more than 100,000 customers were changed for a service that was useless to them.
The 'wire maintenance' service was not needed by Kiwis using wireless broadband and fibre connections and there was no way for those customers to benefit from the additional fee.
According to the Commission, Spark had already refunded around $15 million to customers, with nearly $350,000 still to be refunded to nearly 5000 customers.
The investigation began in 2020 following a consumer complaint. The investigation found between 2014 and early 2021, the company charged 400 wireless broadband customers and around 112,600 fibre connection customers for the service.
Spark collected around $15.7 million in fees for the service from those customers over the six-year period, it's been revealed.
Commission Chair, Anna Rawlings, the Commerce Commision chair, said Spark's conduct likely breached the Fair Trading Act.
The website "created an impression" that the wire maintenance service was suitable for all connection types, when it wasn't. Misleading representations were also made via invoices to customers for the service that would be of no use to them.
"Customers must be able to rely on information businesses provide to them when they are buying, contracting or being invoiced for services," said Rawlings.
"Businesses should not be charging customers for services that they don't need or have no use for, or services that they cannot practically benefit from. If extra services or costs are charged, businesses must ensure that information about them is clearly disclosed to customers and is accurate, complete and easy to understand.”
Spark has now stopped selling the service to those with fibre connections or wireless accounts.
The company says it is putting system fixes and processes in place to prevent the wire maintenance service being offered to these customers in the future.
Customers affected who remain with Spark have already had their money returned as a credit to their accounts.
Where affected customers are no longer customers of Spark, refunds can be paid to a nominated bank account, donated or transferred to another customer's Spark account.
Customers who previously had wireless or fibre broadband accounts with Spark and think that they might have been charged for the wire maintenance service should consult the Spark website to find out if they are entitled to refunds.
