Case Studies - Customer Service

TDR Case Note T010975 (2012)

The Customer entered into a 36-month contract with the Scheme Member for telephone and internet services from 31 January 2012. The Customer requested early termination of the contract in April 2012 (after three months). The Scheme Member advised the Customer the penalty for early termination would be $7,320 plus GST.

The Customer complained that the system had never been operational, and the fibre charges had not been referred to in the contract. The Customer believed it should not be charged any penalty fees.

The Scheme Member noted the Customer had never notified it of any faults, and therefore there was no record of issues with the service. The Scheme Member explained the Customer's issue with the SIP lines was caused by a configuration issue on the Customer's PABX and the Scheme Member was unable to bear any responsibility. The Scheme Member noted the Customer was unaware of the Ethernet circuit installed for providing high speed internet, and was therefore aware of the charges.

The Adjudicator found contract clearly spelled out how the Ethernet would be used, so the Customer was aware of it. With reference to the Contractual Remedies Act 1979 (CRA), the Customer was not induced to enter the contract through misrepresentation as the Customer was not aware of the difference in terminology used for the Ethernet. With regard to the Contractual Mistakes Act 1977 (CMA), the Customer was not aware of the different terminology for 'Ethernet', so the mistake did not induce the Customer to enter the contract.

However the Adjudicator found the Scheme Member referred to the same item by two different names in the contract's terms and conditions, and the service standards. This confused the Customer. The Adjudicator found the Scheme Member had failed to meet the standards required by the service standards in the Customer Complaints Code to that extent.