Slingshot parent company Callplus Services Limited faces a $250,000 fine after pleaded guilty in the Auckland District Court to ‘slamming’ customers.
The action was brought by the Commerce Commission.
Slamming is when customers are unknowingly transferred from one service provider to another.
In its investigation, the Commerce Commission found that Slingshot “vigorously pursued payment” when customers refused to pay for such a service. In some cases it referred customers to debt collect agencies.
The court found Slingshot guilty of 50 breaches of the Fair Trading Act involving 27 customers. However, those case could be the tip of the iceberg.
A statement from Telecom Retail CEO Chris Quin says Telecom NZ received 679 customer complaints regarding Callplus or Slingshot between 2008 and 2011. In 2010, Slingshot accounted for 67 percent of complaints sent to Telecom’s investigating team.
In a number of cases customers were mislead into thinking they were talking to Telecom NZ staff during phone calls. Some were told it was mandatory to change their accounts from Telecom NZ.
Telecom NZ says it is pleased Callplus was convicted and fined. Quin says his company faced lost customer revenue and costs from investigating complaints as well as legal expenses.