The Commerce Commission is taking power company Mercury to court for wrongly charging customers termination fees.
Customers were told they could be charged $150 if they switched providers, the Commerce Commission says. File photo Photo: 123RF
The competition regulator filed seven charges against the power company under the Fair Trading Act for making misleading representations to customers between 2017 and 2020.
It alleged Mercury told customers it could charge a $150 termination fee if they wanted to cancel their fixed-term plan or switch providers, which contradicted the company's own terms and conditions which were updated in 2016.
"Mercury had an obligation to ensure that its relevant staff were fully aware of the contract terms, including changes to those terms, and the terms were adhered to, so that customers were not misled," Commerce Commission general manager fair trading Vanessa Horne said.
"In our view, the complaint and our investigation revealed systemic problems inside Mercury that resulted in harm to customers."
She said almost all customers who were incorrectly charged had been refunded.
"However, there may well be a number of other people who have remained customers of Mercury to avoid the early termination fee - which is not fair on them or potential competitors in the retail energy market."
The case was an important reminder to businesses to ensure they had appropriate systems in place to ensure they were following the law, she said.
The first court appearance is set down for 16 August.
A Mercury spokesperson said it had cooperated with the Commerce Commission throughout its investigation and was working to resolve the matter as quickly as possible.
It said 2055 customers were affected between September 2016 and November 2020.
"We have focussed on making this right with impacted customers by sincerely apologising to them, refunding the early termination fee and making a small additional payment in acknowledgement of our error (completed in early 2021).
"In a small number of cases in which we have been unable to locate an impacted customer, we have set aside their unclaimed credit balance, and at the same time donated the equivalent of their unclaimed credit balance to the Starship Foundation."