Case Studies - Customer Service

TDR Case Note T012114 (2012)




The Customer (a small business based in Orewa) subscribed to landline, broadband, and cellphone services with the Scheme Member Provider (Provider).

After receiving confirmation of the phone number, the Customer arranged all its printing and advertising and waited for the calls to come in. They did not, and the Customer discovered that when anyone based locally tried to call, they got a 'dead line' signal, and, the Customer presumed, decided that the business was not yet open for operation. The Customer finally discovered that local callers had to add '09' before the number in order to get through, due to the fact that the Provider had allocated an Auckland Central city phone number to the Customer. Local callers were not aware that they had to add '09'. The Customer was advised that he would need a new phone number to resolve this issue.

The Customer complained and sought $5,000 towards advertising costs and compensation of $9,770 for staff wages, as employees had been engaged for the opening of the business but had no work to do because of the number issue.

The Provider confirmed that the Auckland number was allocated to the Customer in error and offered to reimburse the Customer for advertising costs of $4,102.69 as verified by the relevant invoices. The Provider also offered an additional goodwill gesture of $2,500.00, but added the condition that this offer would be off the table if the Customer declined it, in which event and the Provider would offer only 3 months plan charges (being $447).

Adjudicators decision

The Adjudicator found that the issue giving rise to this dispute was that the Provider issued a number that required an area code to call from within the Customer's local area. The Provider had admitted its mistake and had partially remedied the situation by allocating a local number. The remaining issues were the remedies for the Customer's claims for the cost of advertisements and hired staff. The Adjudicator found that Provider had agreed to reimburse the cost of re-advertising and reprinting, so there was no remaining issue to be adjusted upon with respect to those costs.

With regard to the compensation toward the Customer's staff wages, with reference to the Provider's Terms and Conditions, the Adjudicator found that the parties could contract out of the Consumer Guarantees Act 1993 (CGA) because the Customer entered into the contract with the Provider as a business. Moreover, the Provider's Terms and Conditions excluded the Provider's liability relating to "any loss of profits or revenue, loss of data, lost business or missed opportunities, wasted expenditure or savings". In addition, with reference to clause 21.1 of the Customer Complaints Code (the Code), the Adjudicator cannot award compensation in respect of the claim for the cost of wages for the staff employed by the Customer.

Final outcome

The Adjudicator upheld the Customer's complaint and concluded that the Provider made an error that led to expenditure on advertising containing a phone number that did not meet the needs of its client.

The Provider therefore had to pay for the advertising that had the wrong phone number. The Customers complaint was therefore upheld in part.