The Commerce Commission has warned Spark for likely breaching the law when it notified customers of a broadband price rise last year.
The warning follows an investigation into statements Spark made announcing a price rise on its website and in emails in August and September last year. Spark notified in-contract customers that the price of its copper broadband plans were going up by $5 per month.
Spark’s terms and conditions stated that it would not change the monthly charge for in-contract customers without either gaining their consent, or giving them the option to cancel their contract without early termination fees.
But, the commission said that when Spark notified its customers of the price rise on its website and by email Spark did not explain that if customers did not consent to the price rise they had the right to terminate their contracts without penalty.
Stuff reported that Commissioner Anna Rawlings said the commission believed Spark had likely breached the Fair Trading Act by "making false or misleading representations about the existence or effect of its customers' rights when it notified them of the price rise".
"In the commission's view, customers reading Spark's notification of the price rise would have assumed that Spark had a right to increase price without discussing it with the customer and that the customer had no choice but to accept the price increase," she said.
"In fact, customers who did not agree to the price rise could terminate the contract without incurring an early termination fee and could take up a more acceptable offer elsewhere if they wanted to."
Businesses must not create the impression that prices could be unilaterally increased if that was not permitted, or if consumers were not bound to accept an increase," she said.