CallPlus fined $250,000 over 'slamming'
CallPlus chief executive Mark Callander has admitted the company "got some things wrong" after it was fined $250,000 for transferring customers to its Slingshot phone and broadband service without their permission.
However, Callander said its mistake was limited to not properly overseeing the work of a third-party telemarketer that it engaged to sell its services.
"We didn't know until a complaint came in whether a customer had been transferred without the right authority," Callander said.
CallPlus Services, which trades as Slingshot, yesterday pleaded guilty at Auckland District Court to transferring 28 households to its phone and broadband service without their consent. It pleaded guilty to a total of 50 individual charges brought against it by the Commerce Commission under the Fair Trading Act.
The commission said it had received 100 complaints between 2009 and 2011. They alleged that telemarketers, acting on behalf of Slingshot, had misled people or switched them to Slingshot without their agreement. The illegal practice is referred to in the telecommunications industry as "slamming".
Two of the victims, retired couple Roger and Rosalie Inwood from Christchurch, said they received a call from a telemarketer and told her they would be prepared to receive information from Slingshot about their services. But instead of receiving information to review, they got a letter from Slingshot welcoming them to the company, and a bill.
Slingshot "stalled and stalled and stalled" resolving the matter, until they threatened legal action and to get the Commerce Commission involved, Roger Inwood said. The issue was complicated by the fact Slingshot would only deal with his wife, who took the telemarketer's call, while their original accounts with Telecom and TelstraClear were in his name. "It was quite stressful," he said.
The commission said its investigation established that Slingshot exacerbated its behaviour by "vigorously pursuing payment when customers refused to pay for a service they had not agreed to acquire".
In some cases Slingshot referred customers to debt collection agencies and continued demands for payment despite consumers receiving assurances from other Slingshot staff that the matter had been resolved and no further action was required, the competition watchdog said.
Judge Russell Collins said the actions of Slingshot had a "real and disturbing impact on customers in the marketplace". Commerce Commission consumer manager Stuart Wallace said Slingshot's actions were "very disappointing".
The commission said it had also laid charges against Power Marketing Limited, which acted as Slingshot's marketing agent. Power Marketing Limited was defending some of the charges, it said.
Callander said CallPlus "took very aggressive actions with Power Marketing at the time on these matters".