Three years ago the Herald on Sunday uncovered an egregious abuse of telemarketing called in that industry "slamming". A contractor for the telco Slingshot had gained unauthorised access to Telecom's customer database and was using the information to "cold call" Telecom's customers with the advantage of what it knew of their accounts. It has taken nearly three years for Slingshot to be punished.
The company pleaded guilty in the Auckland District Court this week to 50 charges brought by the Commerce Commission under the Fair Trading Act. Slingshot was fined $250,000 for conduct that Judge Russell Collins said, "had a real and disturbing impact on customers."
The company that did the cold calling on Slingshot's behalf, Power Marketing, has been separately charged by the commission in a case to be heard next year. But Slingshot admitted its oversight of Power Marketing had been inadequate. Slingshot was the fastest growing telco in New Zealand from 2009-2011. When the Herald on Sunday investigated in January 2011, Slingshot's growth was explained.
Power Marketing staff had the login to a database containing names, addresses and billing details for about 2.15 million Telecom customers. It told the telemarketers exactly what plan the customer was on, how much had been paid and whether the customer was tied to a contract.
As one of our informants said, it put the customers at a disadvantage because the caller knew their accounts better than they did - knew them so well the customers could gain the impression they were talking to Telecom staff.