Telco incumbent Spark has refunded around $15 million to nearly 113,000 broadband customers, for wire maintenance service that was unneeded or unusable by them.
The Commerce Commission said Spark has provided it with enforceable undertakings to refund all affected customers, following a complaint received by the regulator in 2020 that resulted in an investigation.
Said to cover the cost of maintenance callouts for common faults affecting customers' on-premises telecommunications wiring, splitters and jack points, Spark charged $4.95 a month for the service unless subscribers opted out of it.
The service may have been of some use to customers with copper-based connections, the Commission said, but not so for wireless and fibre service subscribers.
Spark charged over 400 wireless broadband customers the wireless maintenance service fee, and some 112,600 fibre subscribers, even though most would not need it.
In the process, the telco collected roughly $15.7 million between 2014 and early 2021, the Commission said.
Chair of the Commission Anna Rawlings said Spark's conduct likely breached the Fair Trading Act by creating an impression on the telco's website that the wire maintenance service was suitable for all connection types, when it was not.
Spark also made misleading representations through customer invoicing for the service, which would be of no use or benefit to them.
“Customers must be able to rely on information businesses provide to them when they are buying, contracting or being invoiced for services,” Rawlings said.
“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,” she added.
Spark has stopped selling the service, and is in the process of voluntarily refunding customers for the fees it charged.
Almost 5,000 customers are still to claim the refund, with 1233 subscribers each eligible to receiver over $100.
The Commission said Spark has been investigated a number of times for potential breaches of the Fair Trading Act since 2017.
