Wellington, March 3 NZPA - Telecom subsidiary Xtra has been fined $45,000 plus $10,000 costs after it was found guilty of breaching the Fair Trading Act by lying to customers about its charges.

Xtra was convicted in Wellington District Court today on three charges of misrepresenting to complainants that its pricing, conditions attached to its services or its billing systems had been approved by the Commerce Commission.

These were in situations where consumers were challenging the validity of Xtra's charges or conditions. The complaints were laid from September 2005 to November 2006, the Commerce Commission said in a release today.

Xtra had told one customer that the Commerce Commission had tested Xtra's billing systems. Another was told that she could not access her Xtra internet account from another internet service provider's connection because of a decision by the "Telecommunications Commission".

A third customer was told that Xtra's pricing was in line with Commerce Commission guidelines. The court found that all of these statements were false.

"This case serves as a reminder to all businesses that they cannot claim endorsement or approval that they do not have," said Commerce Commission Christchurch fair trading manager Stuart Wallace.

In February 2005, the commission had warned Telecom for similar conduct. As part of the warning, Telecom had been told it needed to ensure that its staff were fully aware of the consequences of claiming any actual, or implied, approval by the commission.

Telecom was warned that any such claims in the future could result in more serious enforcement action. The court found that Telecom had taken no effective action to avoid further similar breaches after receiving the commission's initial warning.

The court's judgment confirmed that businesses should take particular care in providing adequate training to their staff to lessen the likelihood of misleading information being given to consumers.

Judge Thomas Broadmore noted that Telecom's training programme at the time of the offences had fallen a long way short of what was reasonable given the high relevance of the Fair Trading Act to Telecom, the company's previous history with the Commerce Commission and the commission's specific warning.

He also noted that Xtra's call centre deals with a high volume of complaints and that Telecom has since put in place more comprehensive training material for their customer service representatives.

"Businesses need to ensure that training, policies and procedures are in place so that their staff are always giving consumers accurate information," Mr Wallace said.

"Consumers rely on accurate information in order to be able to make informed decisions. Misleading information can also harm other businesses who are complying with the law."

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