Scoop has an Ethical Paywall
Trustpower misleads with untrusty broadband ads
Trustpower's $49 unlimited broadband offer always looked too good to be true. It turns out, it was too good to be true. At BusinessDesk Paul McBeth reports Trustpower to plead guilty over misleading broadband offer.
He writes:
Trustpower intends to plead guilty to charges claiming the electricity generator and retailer mislead customers over the market and sale of a bundled power and broadband offer.
The Commerce Commission filed seven
charges under the Fair Trading Act in the Auckland District
Court over a Trustpower ad campaign between March and July
last year promoting a $49 a month deal promoting 12 months
of unlimited broadband in a bundle package, it said in a
statement.
What isn't clear in the advertising is that
the $49 price is only for customers who sign a two-year
contract. And even then only for the first year of the
contract. The second year would cost $79 a month.
This means the total cost of a two-year contract is $1536 or $64 a month over two years.
Details in the small print
Trustpower only reveals the full contract cost in small print. Also almost out of sight is a clause telling customers about exit fees for those who leave early.
Tauranga-based Trustpower sells broadband services to around a quarter of its electricity customers.
Tying two utilities together this way can be a clever move. If a utility has an efficient billing system, it can squeeze costs.
Trustpower lowest broadband prices
Yet, some of Trustpower's rivals suspect it sells broadband below cost. The headline $79 a month for unlimited data is set well below prices charged elsewhere.
With the wholesale price of a broadband line costing $41 a month, there is little left to pay for support, backhaul and other costs.
One electricity insider suggested that consumers
looking for a low-cost internet connection have a good idea of the going rate for a broadband connection think they are getting a bargain. Meanwhile Trustpower more than makes back the shortfall from selling electricity.
A danger with fixed-term broadband contracts is the retailer has less incentive to perform. Many internet contracts are not fixed. If support or service isn't up to scratch, consumers can find a provider more interested in meeting their needs.
Trustpower misleads with untrusty broadband ads was first posted at billbennett.co.nz.
Bill Bennett
Freelance journalist.
Auckland-based Bill Bennett writes technology and business stories that are directly relevant to New Zealand readers.
His emphasis is on telecommunications, but he also covers other aspects of technology and business. You can find his features in the New Zealand Herald and hear him regularly on RNZ Nine to Noon and the NZ Tech Podcast.
Bennett's The Download Weekly newsletter is published every Friday. You can sign up for it here.
If you want to support his work, you can make a donation to his PressPatron account.
Binoy Kampmark: Detained Without Charge - Eleven Yemenis Leave Guantánamo
Ramzy Baroud: The War Criminal 'Victim' - Netanyahu’s Inevitable Fate
Martin LeFevre - Meditations: From Symbolic Consciousness To Insight Consciousness
Binoy Kampmark: Arresting And Killing Greenies - Targeting Climate Change Protests
Ian Powell: Welcome Puberty Blockers Report But Beware Derailing Transphobia
Gordon Campbell: On Why We Can’t Survive Two More Years Of This