Vodafone misled customers - again

Vodafone HQ in Auckland. Photo / Brett Phibbs

Mobile phone giant Vodafone has been found guilty of misleading customers through false advertising, less than two months after it was fined over $400,000 for similar offending.

The Commerce Commission laid a representative charge under the Fair Trading Act against Vodafone over its "$1 a day" mobile internet plan, which the company defended in the Auckland District Court.

Vodafone's website said customers could pay $1 for 10MB and would be charged only for what they used.

It also promised: "If you use less than $1 a day we'll only charge for what you used".

But yesterday Judge Anne Kiernan found the company's advertising was "liable to mislead the public".

Vodafone's general manager of corporate affairs Tom Chignell apologised that the company's communication was not as clear as it should have been.

"We accept that some customers may have been disappointed that they had to pay a full $1 for their casual data usage, when they didn't use the full 10MB of data.

"As soon as we were alerted to the problem we changed our website to make it clear to customers that they would pay $1 a day for up to 10MB of data, even if they used only a smaller amount," he said in a statement.

The company said it did not deliberately set out to mislead its customers.

The commission had said Vodafone misled customers during its $1 a Day campaign between July and November 2008. Commission lawyer Nick Flanagan said customers thought they were paying "$1 a day" for 10 megabytes of data but they were actually charged $1 after using only about 2 per cent of the 10MB allocation.

Mr Flanagan told the hearing in August that three complaints to the commission suggested customers thought they would pay only a fraction of the $1 if they did not use all 10MB.

One complainant, Linda McCracken, told the commission, "I took this to be that if, for example, I used 5MB it would only cost me 50c and if I used 2.5MB it would cost me 25c."

Mr Flanagan said there was no way customers would have known Vodafone's pricing structure.

For Vodafone, Bruce Gray, QC, said the telco never set out to mislead customers and likened the billing plan to all-day parking. People who paid for all-day parking but left at 11am did not expect a refund on their remaining hours.

The $1 a Day promotion was similar in that clients paid $1 for up to 10MB, he said.

Judge Kiernan said today that the reasons for her decision would be released in writing later this afternoon.

She said she was "satisfied beyond reasonable doubt" that the company had misled customers.

The company will be sentenced in November.

The finding comes less than two months after the multi-national was fined $402,375 for its Vodafone Live website.

The Auckland District Court heard how one Vodafone Live customer spent sleepless nights and another rang the company call centre in tears after being charged hundreds of dollars for a mobile internet service they thought was free.