The large electricity generator and retailer, Mercury, has been fined $279,500 for telling 2,000 customers that they had to pay an early termination fee when this was not true.
The Commerce Commission argued this breached the Fair Trading Act and took Mercury to court.
In a reserved decision released by the Auckland District Court, Judge Simon Lance said Mercury's communications to its customers were a material departure from the truth.
"Retail electricity services are an essential consumer good for all households," he said.
"Accordingly, traders who supply essential services do have a responsibility to ensure that representations to consumers are not misleading."
In an explanatory note, the Commerce Commission says changes to Mercury’s terms and conditions in 2016 meant that customers cancelling an automatically renewed fixed term plan would no longer be required to pay an early termination fee. However, between 2017 and 2020 Mercury gave the opposite view to customers.
In a response, the Commission says Mercury has refunded almost all customers who were incorrectly charged and is asking any other customers who are in the same situation to come forward.
Mercury is one of the big four electricity companies and is listed on the New Zealand and Australian Stock Exchanges. It is 51% owned by the state. The company generates only renewable electricity from nine hydro schemes on the Waikato River as well as from geothermal and wind sites.
In a statement, Mercury says it is extremely disappointed that the incident occurred.
"We acknowledge we got things wrong in this case – it was a genuine mistake and we have focused on making things right as quickly as possible," the company's General Manager of Commercial Operations Craig Neustroski says.
"We completed remediation almost two years ago, which included apologising to impacted customers, and providing refunds and a small additional payment in acknowledgment of our error.
"In a small number of cases in which we have been unable to locate an impacted customer, we have set aside their unclaimed credit which will be refunded when we locate them, and at the same time donated the equivalent of their unclaimed credit balance to Starship (hospital)."
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.