The New Zealand Commerce Commission has notified Spark that it intends to file court proceedings today against Spark under the Fair Trading Act 1986 in relation to three separate historical operational and billing issues.
The issues relate to an equipment fault in 2015 that affected data billing for a small percentage of broadband customers; incorrect implementation of a ‘welcome credit’ when joining Spark for some fibre broadband customers during 2016; and a billing implementation issue relating to a 30-day notice period when customers left Spark.
In respect of all of these issues Spark has already applied credits to the accounts of all impacted customers and, for former customers, has made extensive efforts to return all money owed so they receive the benefit of their credit (some of these customers left Spark a considerable time ago and their contact details may have since changed).
While Spark has already refunded many of these former customers over the past 12 months, it has been seeking to reach more of them as part of its “Make Sure You Get What’s Yours” consumer campaign launched in May 2018. Through this campaign, Spark has so far returned over $1.1 million to customers in credits owing (relating to a wide range of circumstances, not just the 30-day billing issue).
Spark also made donations in 2017 to various charities totalling approximately $268,000, in recognition of the interest it was likely to earn (over a sustained period) on unclaimed credit balances arising from the 30-day billing issue – because Spark did not intend to profit from this issue.
“These were all system-based errors caused by genuine mistakes with no malicious intent involved on the part of Spark. That being said, we are deeply disappointed that these issues have affected our customers,” commented Spark’s managing director, Simon Moutter.
“Our preference has consistently been to settle these matters and avoid court proceedings. To this end we have held extensive discussions with the Commerce Commission, including our suggestion that we make a settlement payment (possibly in the form of further charitable donations) to acknowledge our errors. Given the unintentional nature of the errors involved and the extensive actions already taken by us to put things right for our customers, we are obviously disappointed the Commerce Commission is now embarking on what will be a costly, time-consuming court process for both parties.”
Spark will review the Commerce Commission’s proceedings and has yet to determine the position it will take in response.
Although the Commerce Commission has outlined the maximum possible penalties available under law for each of the charges, it has not yet advised Spark of the penalties it will actually seek. The decision as to any actual penalties will ultimately be one for the court.
To give some context to the impact on customers, Spark notes that the 2015 equipment fault issue has been resolved for all 5,325 affected customers (with credits or compensation totalling $216,937), as has the 2016 ‘welcome credit’ issue for all 463 affected customers (with credits totalling $46,300).
The 30-day billing issue affected a number of customers who left Spark over a three-year period and Spark has since given refunds to most of them. As of last week, there were up to 8,829 former customers, owed a total of $304,070, who despite Spark’s best efforts to contact them had not responded. More than 90% of these former customers are owed less than $100.
“As a business, we’ve been through a massive amount of change over the last few years and this has significantly improved our customer service delivery. These errors were for the most part an unfortunate and unintended consequence of some of the change we’ve been through and we regret that they occurred,” Mr Moutter said.
“We have spent time learning from these issues, amending processes, updating training and staff resources – and we continue to work hard to ensure these kinds of errors don’t recur in future. We have made every effort to ensure that customers have received all amounts owing to them and will continue to do so.”