Know your rights: How to avoid a raw deal on broadband and other tech

by Peter Griffin / 10 July, 2018
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If you’ve experienced “bill shock” with your broadband provider or had an argument with an electronics retailer over a faulty product lately, you aren’t alone.

Tech companies, telcos and electronics retailers haven’t covered themselves in glory in the last six months, featuring prominently in Commerce Commission legal action or warnings issued for alleged breaches of consumers’ rights.

Eleven charges were laid by the Commission yesterday against Spark, the country’s largest broadband provider, which is alleged to have overcharged customers for broadband data, misled new customers over a sign-up offer and overcharged customers who had terminated their contract.

The charges are before the Auckland District Court, but Spark says it has already refunded customers to the tune of $1.1 million over the past year to address some of the issues.

“These were all system-based errors caused by genuine mistakes with no malicious intent involved on the part of Spark,” said Spark’s managing director, Simon Moutter, in a statement.

“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,” he added.

True fibre?

But the Commission likes to make a point. In April, it was again in the Auckland District Court, laying 27 charges against Spark’s biggest rival, Vodafone. The broadband provider was in hot water over Fibre X, a high-speed internet service it offered in Wellington, Christchurch and Kapiti between October 2016 and March 2018.

The Commission received complaints from consumers who thought that Fibre X was a true fibre-optic broadband service, the type of which has been heavily marketed as part of the government-funded ultrafast broadband network.

In fact, Fibre X was offered over Vodafone’s long-established hybrid-fibre coaxial (HFC) network, using a mixture of fibre and copper cables. Ultimately, it doesn’t boast the same performance as pure fibre connections and the Commission alleged the marketing of Fibre X was misleading. That case continues.

Some of our largest electronics retailers have also been warned by the Commission in recent months. Noel Leeming, which sells everything from big-screen TVs to laptops, faced nine charges in April relating to misleading customers on their rights under the Consumer Guarantees Act to return faulty goods for a refund or replacement.

Apple in May received a warning from the Commission over similar complaints. The iPhone and MacBook maker does brisk business through New Zealand retailers and its own online store. But the Commission said it had likely misled consumers about their Consumer Guarantees Act rights, by telling some of them there was a two-year guarantee on Apple products, and sending them to deal with the manufacturer of non-Apple products it was selling.

To be clear, there is no time limit on returning a faulty product under the Consumer Guarantees Act. Products must be of “acceptable quality”, meaning they should last as long as you’d reasonably expect them to when used as intended.

A retailer can’t opt out of the Consumer Guarantees Act, unless it is fair and reasonable to do so. Sometimes, they’ll put you in touch with the manufacturer to expedite a repair or replacement, but the problem is still very much theirs to deal with.

Apple’s $9 million mistake

Apple has so far avoided legal action here over “error 53”, which saw an update to Apple’s iOS operating system disable some iPads and iPhones. Apple told at least 275 Australian customers affected by error 53 that Apple wouldn’t help them if their device had already been repaired by a third party service agent.

The Australian Competition and Consumer Commission said that was in breach of Australian Consumer Law and Apple has been forced to pay A$9 million in penalties as a result.

Then we had the case of PB Technologies, the fast-growing electronics retailer with 11 stores nationwide. Last week it pleaded guilty to 14 charges brought by the Commerce Commission for failings in its extended warranty agreements. It was also warned for “bait advertising” after it sent an email to 100,000 people on its mailout list offer Apple Watches at a ridiculously low price. The catch - it only had 14 watches available.

On the extended warranties, which are a waste of money anyway due to the power of the Consumer Guarantees Act, PB Tech failed to give customers a summary comparing the extended warranty rights with the Consumer Guarantees Act. It also didn’t give them a copy of the extended warranty agreement after paying, nor did it tell them about their cancellation rights before signing up.

Bad players

Between misleading or bait advertising and a persistent will to dodge their obligations under the Consumer Guarantees Act, are telcos and the tech sector any worse than other sectors?

It is true that they’ve had a particularly rough patch with the Commerce Commission of late, but the typical list of court cases brought by the Commission in any given year features a wide range of businesses - from debt collection companies to car dealerships and everything in between. Still, the complexity of some tech-related products and services does pose the potential for trouble.

Mobile phone and broadband plans can include numerous charges for line rental, monthly data use, calling and texting, entertainment services and the cost of hardware. That can mean a complex billing equation each month - where things tend to go wrong is when changes to a plan are made or discounts are applied incorrectly or fail to be applied at all.

But the complexities of telecoms billing are no excuse for misleading customers over the performance of products and services in a bid to compare favourably to rivals.

In the retail space, the equation is usually a lot simpler. The Commerce Commission takes a dim view of misleading advertising, though there is often intense debate around what is in fact ‘misleading’.

Staff at retailers continue to argue with customers over what is a reasonable lifespan for a product under the Consumer Guarantees Act and what the remedy should be - replacement, repair or refund.

Consumers almost always have more protection under the law than they realise and are too often pushed around by confident salespeople or call centre agents.

Ultimately, all of the companies listed above have strong brands to protect, so regular attention from the Commerce Commission is not in their interests. In the telco space, where margins are tight already, customer service and trust can sway a phone and broadband user to go with one provider over another.

Retailers already face huge pressure from online-only rivals so playing hardball with customers over faulty goods is a great way to drive customers away.

Still, the best way to avoid getting a raw deal is to keep your eyes open when you deal with telcos and tech retailers. Here are six tips for being treated fairly when you are in the market for tech and telecoms products and services.

6 tips when buying tech and telecoms

  • Read the small print: If you are switching to a new mobile or broadband plan, read the details of the deal and the associated terms and conditions closely. Are their exceptions or limits that will lessen the benefits that are being touted on the billboards? When it comes to hardware, make sure the specifications of the product are fit for the purpose you have in mind. Do your own research, don’t rely on the salespeople for advice.
  • Read your monthly bill, closely: Once you’ve signed up for a phone or broadband service, keep an eye on the bill - whether you get it in letter or electronic form. You may be getting charged for exceeding a data cap or making purchases you are unaware of. Look at the line items each month to make sure you are getting what you paid for. Are you being constantly stung with overdue payment fees? You have a right to be told if there is going to be a change in the price you are being charged, so make sure to keep an eye on correspondence from your service provider.
  • Lodge queries quickly: If there’s an unexpected item on your bill, get in touch with the service provider quickly to query it. If you haven’t time to sit on hold waiting for a call centre agent, use the chat or email service to lodge a query quickly. If a tech product is faulty or even not working as intended, go back to the retailer as soon as possible with your receipt and explain what you want as a remedy.
  • Know your rights: No one has time to wade through consumer legislation, but it does pay to bone up on the one piece of legislation that will protect you in a lot of cases where you are buying a tech-related good or service - the Consumer Guarantees Act. This helpful summary is all that you need to know. The CGA applies to services as well as goods, so is as relevant to a broadband package as buying a new dishwasher.
  • Complain often and loudly: Retailers will try to deal with genuine complaints and queries quickly and efficiently - it makes good business sense to do so. But experience tells me that they often need a hurry along. Knowing they are dealing with a savvy, confident consumer who knows her rights, is more likely to yield a quick and satisfactory result.
  • If you aren’t getting a decent response from a salesperson, ask to speak to the manager. If you are making no progress, consider taking your case to the Disputes Tribunal. If you feel there has been a breach of consumer law, you can complain to the Commerce Commission. All of the cases above only received the Commission’s scrutiny because people came forward and complained. By doing so, you could get a better outcome yourself, but also help others in the same position and help stop the bad behaviour in general.



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