The Commission filed proceedings against retail telecommunications providers Callplus Services Limited, Orcon Limited and Switch Utilities Limited ( the Companies ) for contravention of the Fair Trading Act 1986 (FTA) by failing to disclose in uninvited direct sale (UDS) agreements, clearly and in writing, that consumers who cancelled utility contracts would be liable to pay substantial early termination fees (ETFs) of between $130 and $250. The Commission sought declarations that the disclosure failures and subsequent charging of ETFs breached s 36L and s 9 of the FTA, as well as orders for refunds under s 43 to affected customers. The parties have agreed that the primary legal question to be determined on the basis of an agreed case stated was “whether early termination fees are part of the total price payable and any other consideration to be given and needed to be disclosed under s 36L(2)(b) of the FTA”. In a judgment released on 29 November 2022 in the High Court in Auckland, Justice Lang answered the question in the Commission’s favour. As a result of the High Court’s finding, the Companies have entered into a settlement agreement with the Commission, agreeing to refund affected customers the fees they have paid. In total, 4,277 customers had early termination fees applied to their accounts, and 2,636 of those customers paid the fees – a total of approximately $473,688. This amount will now be refunded to affected customers by the Companies.
