Telecom admits misleading broadband users over data

Telecom has admitted breaching the Fair Trading Act after misleading customers about the amount of broadband they used.

The telco said due to a software fault its broadband usage meters, it gave inaccurate readings for approximately 97,000 customer accounts between November 2010 and June 2011.

The Commerce Commission said the result of this was that about 47,000 customers either:- Had the speed of their broadband service reduced to dial up speed once the reading reached their data cap.

- Upgraded to a more expensive monthly broadband plan to increase their monthly data allowance due to an incorrect perception about their data usage.

- Were charged overage for the amount of data that they used above their data cap.

- Reduced their data usage so as to not exceed their monthly data allowance.

Telecom issued a public statement in June 2011 outlining the fault and its intention to refund affected customers.

To date, Telecom had written to affected customers and refunded more than $2.7 million, the Commerce Commission said.

"We're pleased to have reached a settlement with Telecom and that they have made prompt refunds directly back to the customers who have lost out," Commission competition manager Stuart Wallace said.

"Telecom brought this issue to our attention as soon as they were made aware by their customers and have co-operated fully with the Commission.

Due to Telecom's immediate admission of a breach of the Fair Trading Act, followed by appropriate compensation to customers, the settlement is the best possible outcome for those customers and avoids potentially lengthy and costly court hearings paid for by taxpayers."