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EQC payment policy complaint rejected

MICHAEL WRIGHT
Last updated 08:59 19/10/2012

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Christchurch Earthquake 2011

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An earthquake repairs contractor is ''dumbfounded'' the Commerce Commission has rejected his complaint about the Earthquake Commission's payment policies.

Russell Poole, a co-owner of the Fix It building repair franchise, said the commission's new opt-out rules were anti-competitive.

The EQC in July changed the payment process for customers who opted out of its Fletcher-managed quake repairs scheme (EQR), handing responsibility to the homeowner.

It previously paid contractors directly.

Poole alleged this breached the Commerce Act, which states a person with a substantial degree of power in a market must not take advantage of that power for the purpose of restricting entry of another person into that market.

Commerce Commission competition manager Ritchie Hutton said in a written response that it was ''satisfied'' the EQC had acted fairly.

''We will be taking no further action regarding your complaints,'' he said.

Delays in customers obtaining their scope of works, which Poole claimed the EQC deliberately withheld to discourage opt-outs, were because of  ''internal communication problems within EQC's call centre'', it found.

Timing of payments and the separation between the EQC and opt-out repairers were also unlikely to reduce competition, it said. ''The ability of repairers to manage their cash flow is not within EQC's control.''

Poole was ''surprised and disappointed'' by the findings.

''It may well be that I am too close to the subject [but] I remain dumbfounded by the conclusion the commission draws that ... flies in the face of either the evidence provided or the view the majority would take,'' he said.

Wellington-based Poole, who was in Christchurch last weekend for the Canterbury Home Show, said he spoke to many EQC claimants who were being asked for upfront payments by cash-poor opt-out repairers.

Claimants found their interpretation of the EQC's payment policy often differed from the commission's, he said.

''The clauses as written are putting people off opting out as they fear they are worse off, which they are not.''

He planned to post the Commerce Commission decision and his response on Fix It's website to gauge public opinion.

''Maybe they can generate a groundswell of opinion to persuade the Commerce Commission to see things in a different light. Clearly we have failed to do so,'' he said.

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