Telemarketer fined over Slingshot campaign

Last updated 16:27 15/08/2014

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Auckland telemarketing firm Power Marketing has been fined $168,750 for its part in a phone marketing campaign that saw it mislead internet users into switching to Slingshot.

Slingshot, a subsidiary of New Zealand's third-largest telecommunications provider, CallPlus, had already been fined $250,000 after pleading guilty to 50 breaches of the Fair Trading Act last year.

The Commerce Commission said it received more than 100 complaints from internet users who had fielded cold calls from Slingshot contractor Power Marketing between 2009 and 2011.

They complained they had been misled into switching their internet accounts to Slingshot or that their accounts had been switched without their permission; a practice known as "slamming".

Power Marketing was fined after pleading guilty in the Auckland District Court to 23 charges under the Fair Trading Act.

The commission said Power Marketing conducted an initial sales call to ask if customers wanted to switch from their current telecommunications provider to Slingshot.

It was in the course of this call that telemarketing staff sometimes misled consumers to induce them to switch their telecommunication accounts to Slingshot, it said.

"After the sales call, another member of Power Marketing's team would call customers back claiming that they needed to verify their details," it said.

"This second call was actually to seek permission to switch companies, but these conversations were often vague, hurried and left consumers confused about what they had or hadn't agreed to."

Commerce Commission consumer manager Stuart Wallace said the conduct persisted for more than a year and was "particularly disturbing as Power Marketing senior management were aware of an earlier warning by the commission to Slingshot about similar conduct".

"This was very poor behaviour on the part of this marketing company. The telemarketers were desperate to make sales by whatever means possible," he said.

An aggravating factor was Power Marketing improperly used a database owned by Telecom that contained private account information of Telecom customers, the commission said.

It said last year that Slingshot had "exacerbated" Power Marketing's behaviour by "vigorously pursuing payment when customers refused to pay for a service they had not agreed to acquire".

CallPlus chief executive Mark Callander said it had been let down and misled by Power Marketing, with which it no longer had an association.

There were "101 reasons" why consumers could now trust CallPlus, he said.

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"We have recently won broadband service provider of the year and we have fundamentally turned around the way we acquire customers," he said.

"Our customer satisfaction ratings are some of the highest in the industry.

"We are are doing very well in the market and that is a reflection of how much the business has turned around in the last three or four years."

- Stuff

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