Mercury has around 300,000 household customers.
The Commerce Commission has filed seven charges against Mercury NZ under the Fair Trading Act alleging the country’s third-largest electricity provider misled customers.
The commission said Mercury told some residential energy customers they were required to pay an early termination fee, when they were not.
Mercury, which provides electricity and gas services to around 300,000 households, changed its terms and conditions in 2016 meaning some customers could terminate their plans without paying an early termination fee.
Despite this, Mercury charged some customers $150 termination fees when it had no right to do so, the commission said.
READ MORE:
* Telcos fined $121,500 for billing customers after contracts finished
* Commerce Commission lays charges against Slingshot, Flip and Orcon
* Commerce Commission warns Spark over broadband price rise messaging
This happened to customers who ended their fixed-term energy plans after their initial plan period had finishing, and the plan automatically renewed, the commission said.
The period covered by its charges was between 2017 and 2020.
A spokesperson for Mercury said the company had sincerely apologised to customers.
COMMERCE COMMISSION
If you can’t back it up, don’t say it. First published in 2020.
The commission also alleged some customers were incorrectly told that an early termination fee would be charged if customers wanted to switch providers or that the fee would be waived if they remained with Mercury.
Vanessa Horne, general manager of fair trading at the commission, said Mercury had an obligation to ensure that staff knew its contract terms, and stuck to them so that customers were not misled.
“In our view, the complaint and our investigation revealed systemic problems inside Mercury that resulted in harm to customers,” she said.
“A number of customers were likely to have been misled and potentially out-of-pocket, because there were not robust systems in place.”
Almost all customers who were incorrectly charged and paid an early termination fee have been refunded by Mercury, she said.
“However, there may well be a number of other people who have remained customers of Mercury to avoid the early termination fee, which is not fair on them or potential competitors in the retail energy market,” she said.
A spokesperson for Mercury said: “We have co-operated fully with the Commerce Commission throughout its investigation and are working to ensure the matter is resolved as efficiently as possible for all concerned.
Supplied
Commerce Commission general manager of fair trading Vanessa Horne says companies like Mercury have a responsibility to properly train staff on their contract terms and conditions.
“The matter impacted 2055 customers between 21 September 2016 and 30 November 2020,” the spokesperson said.
Last year, the company sincerely apologised to customers, refunded the early termination fees, and made a “small” additional payment in acknowledgement of its error, the spokesperson said.
“In a small number of cases in which we have been unable to locate an impacted customer, we have set aside their unclaimed credit balance, and at the same time donated the equivalent of their unclaimed credit balance to the Starship Foundation,” the spokesperson said.
Horne said: “We saw this case as a critical one to take because it is about businesses needing to put the right systems in place.
“Things like thorough staff training and robust billing processes are imperative to assist in avoiding these situations in the future.”
The first hearing in the case is expected on August 16.
التعليقات