Chris Barton: How Telecom is losing battle for customers' hearts and minds

Telecom may be about to split into two - a wholesale and retail division - but more drastic surgery will be needed to win the hearts and minds of its customers. Theresa Gattung says losing these hearts and minds is her greatest failing over the last five years as chief executive. But she now wants to put things right and "re-engage" with New Zealanders.

Well Theresa, not only do you have a credibility problem, so does your company.

I found out last month just how un-engaged Telecom was when I tangled with the guardians of its billing system known as Customer Support.

My saga began when I received a late payment charge of $7.50 on a bill for $23.40 from Telecom Directories for a second listing in the phone book. I rang to complain. Yes, I was 20 days late making payment, but this charge - 32 per cent per month interest - is usurious and patently unfair.

"No it isn't," said Mark T472768. "See clause 13 in the Telecom terms and conditions". I pointed out that I wasn't a Telecom phone customer and I didn't recall signing up to such terms and conditions for a directory listing.

Mark T472768 said the terms and conditions were the same for everybody and no, he wasn't interested in hearing my explanation. ( I travelled overseas that month, forgot to post the payment before I left and had to mail the cheque from Canada). Mark refused to escalate my complaint to his supervisor. He said the late payment fee stood and would increase by $7.50 per month if I didn't pay. To paraphrase the infuriating woman on Little Britain, Telecom says no.

I had a similar reaction when I emailed: "As the account was not paid until the 2nd May 2006, the late payment fee was applied," barked Anna Christensen of the Online Support Team in her reply email. She went on to explain that late payment costs Telecom $17 million annually. "It is fair that the late payers should cover this cost. The fee will therefore be sustained on your account."

By now I was very angry and about to cancel my second listing. Show me the proof that I agreed up to these terms and conditions, I demanded. Of course there isn't any proof. Telecom unilaterally imposed the late payment condition some years ago knowing its customers had two choices - like it or lump it. A mark of unbridled monopoly power.

Christensen told me to contact Directories which seemed to know about my case. A very nice Rachael told me a request for a credit had been put through, but that Telecom billing had rejected it. She said it was done as "a goodwill gesture" and she would put through another request.

"Thanks," I said. "I'm glad someone seems interested in keeping my business." But it was to no avail. Christensen: "I have forwarded your email on to Telecom Directories and have asked for one of their specialised representatives to contact you about this as soon as possible."

But, I've already contacted them I wailed. No response. I waited a week and emailed again.

A stonewall reply: "As you had previously been advised that the late payment fee is correct and will not be credited, I am not able to do this for you."

So it was back to Directories. The very helpful Patina immediately escalated the problem to Michelle who promptly rang me back and assured me a credit had been applied to my account. Sanity at last.

Count the things wrong with this picture. First, Telecom automatically applies a usurious late payment fee to an account without giving the customer a reminder notice. Secondly, it doesn't state on its bill that a late payment fee will be applied, but buries what is clearly an unfair term in its contractual fine print. Third, it would rather lose a customer (and regular income) in pursuit of $7.50. Fourth, that a company can dictatorially impose and enforce such a draconian fee shows, in the face of monopoly might, our consumer protection laws are woefully inadequate.

Let's hope the review of these laws comes up with some redress for such breathtaking disdain for customers.