A recent decision of the Commerce Commission again sends warning bells to businesses about misleading their customers … intentionally, unintentionally or by omission.

A large telecommunications company has pleaded guilty to misleading its customers into believing that only the most expensive broadband option is available in certain New Zealand regions. 

In fact, its other broadband options are also technically available to customers in those regions, with the most expensive being an additional option offered in those particular regions.

Under the Fair Trading Act it is an offence to “… in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

The penalties for such conduct can be severe.  An individual could be convicted and fined up to $200,000 and a company could be in the firing line for a fine of up to $600,000.

The Fair Trading Act applies to anyone in trade – from big organisations like hotels, airlines and department stores, to small, or even temporary businesses like a coffee cart.

It also applies to advertising in all forms, such as online, print, TV, social media - and in all dealings with consumers.

Therefore, ensure that all your communications with customers are accurate and clear, including both verbally and in writing, or your business could find itself in hot water.

In hindsight, the telecommunications company in question commented that they should have made it clear that the expensive broadband option was only “recommended” in the areas in question.

 

Kirsten Ferguson

Partner
Rainey Collins