Vodafone pulls plug on failed telco

Intagr8, a customer of Vodafone, has gone into liquidation. Photo / NZME

Troubled telecommunications business Intagr8 has collapsed, owing Vodafone around $1 million and leaving customers in the lurch after a lengthy investigation by the Commerce Commission.

The company was placed into liquidation on Thursday, the same day that Vodafone announced it was terminating its contract with the company after discussions around payment and a review of Intagr8's business model. Vodafone today confirmed that the telco owed it an amount in the vicinity of $1 million.

Vodafone wholesale director Steve Rieger said the decision to cut ties with Intagr8 had been a tough one.

"We have consulted widely and investigated numerous ways to assist Intagr8 in order to maintain a working relationship," Rieger said. "We have done everything reasonably possible to avoid terminating Intagr8's services. Unfortunately, we can no longer continue the relationship."

Intagr8 has been the subject of an ongoing Commerce Commission probe into its sales tactics, after the Commission received numerous complaints from customers accusing the business of misrepresentation.

Intagr8 offered a product known as "telephone bundling" - providing customers with telecommunications equipment such as phones, printers and security cameras alongside its telecommunications services. Equipment was usually rented through a finance company.

The telco's collapse could mean its 2,500 business customers around New Zealand would be left with finance company contracts but no phone lines.

Vodafone set up a hotline yesterday - 0800 888 133 - for anyone with concerns, and said it had already received "a significant" number of calls.

A spokesman from the Commission earlier in the year said they had received complaints dating back to 2012 which had resulted in a "compliance advice" letter being sent to the company. Initial complaints were resolved however more recent complaints around similar issues triggered a further investigation.

In its letter to Intagr8 in December 2012, a number of issues were highlighted.

"The Commission has concerns that Intagr8's sales representatives may not be clearly and sufficiently disclosing the full cost of the bundled products that they are offering," it said.

"The representations have led customers to reach an incorrect view that the goods and phone services that are being offered and signed up to, are available at a particular price without and restrictions/conditions."

According to the Companies Office website, Damien Grant of Waterstone Insolvency was appointed liquidator for the company.

Intagr8's owner Murray Taylor told Fairfax Media that the failure was due to negative publicity.