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The shame of Vodafine NZ

The fine Vodafone New Zealand has been handed this week for misleading advertising is absolutely deserved.
Written by Darren Greenwood, Contributor

The NZ$960,000 fine that the courts delivered to Vodafone this week is absolutely deserved.

If anything, I would say that the telco has got off lightly with its persistent offending.

As Judge David Harvey of Auckland District Court commented, Vodafone was guilty of "gross carelessness" with advertising that was clearly "false and misleading."

The fine, for 21 breaches of the Fair Trading Act, comes on top of several other fines.

As I noted a year ago, Vodafone had six cases working their way through the legal process.

We haven't heard anything about some of the other cases since then, but two other judgments presented the persistent offender with fines now totalling close to NZ$1.5 million.

The amounts represent a record, and are greater than any other single defendant under New Zealand's Fair Trading Act. That record just adds to Vodafone's shame.

Considering that Vodafone New Zealand makes annual profits of NZ$150 millionon revenues of NZ$1.7 billion, NZ$1.5 million is but a drop in the ocean, a mere cost for its mischievous marketing.

Vodafone said it is apologising and making amends. The jury is still out on the latter, but it did admit to its charges, with its apology minimising the damage to its brand.

As I said last year, Vodafone is not some dodgy, fly-by-night operator, but New Zealand's most popular mobile phone company. It is hot and sexy, with the hippest brand.

But such repeated offending will tarnish that brand, which explains its apology.

The New Zealand government's Commerce Commission believes that such a fine presents a strong deterrent to other telcos not to mislead in their campaigning. But is it enough?

The opposition Labour Party noted other recent court cases involving telcos, arguing that consumers need greater protection. Its ICT spokesperson Clare Curran suggested a new watchdog akin to the Australian Consumer Communications Action Network (ACCAN).

New Zealand has a similar body, but the Telecom Users Association of New Zealand gets no direct government cash, and is battling for funding and survival. Thus, it is perhaps in a weakened state at the moment, despite previous campaign success.

If Vodafone is not careful, it will rightly fuel a demand for government action against it and other telcos. Its own actions might even lead to a similar body to ACCAN being set up, with taxpayer funding and a tougher regulatory regime.

As I said last year, Vodafone had better watch out.

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