Marketing company fined $9000 for misleading promotion

1.00pm

Marketing company David Barrowclough Direct Ltd was fined $9000 in Auckland District Court last week for misleading electricity customers, and related charges against four other companies are pending.

The five charges of breaching the Fair Trading Act were laid by the Commerce Commission, which today said it had laid similar charges against Royal Sun Alliance Insurance NZ, Bay of Plenty Electricity Ltd, King Country Energy and Todd Energy.

David Barrowclough Direct had promoted power insurance policies on behalf of the companies from February 2000 to December 2001.

The commission alleged the defendants had promoted the offer with a prize draw to win free power for customers.

The commission said the prize draw was offered before the companies had agreed on draw dates, who would be responsible for the draw, and who would provide or pay for prizes.

The commission said a prize draw was arranged only after it had launched an investigation into the offer.

About 3500 customers took up the offer.

Judge Barbara Morris said there was "clear and considerable negligence" in failing to hold the draw in a timely fashion.

David Barrowclough Direct pleaded guilty to the charges but the four other companies are defending them.

- NZPA