Slingshot fined $250,000 for “slamming” customers

Call Plus Services Limited, trading as Slingshot, has been fined $250,000 after pleading guilty in the Auckland District Court to 50 charges it faced under the Fair Trading Act in relation to the marketing of its telecommunications services.

Between 2009 and 2011, the Commission received over 100 complaints alleging that telemarketers acting on behalf of Slingshot had breached the Fair Trading Act by either misleading customers about the service provided or by switching customers to Slingshot’s services without their consent, known in this industry as “slamming”.

The Commission’s investigation established that Slingshot exacerbated this behaviour by then vigorously pursuing payment when customers refused to pay for a service they had not agreed to acquire.

In some cases Slingshot referred customers to debt collection agencies and continued demands for payment despite consumers receiving assurances from other Slingshot staff that the matter had been resolved and no further action was required.

On sentencing, Judge Russell Collins said the actions of Slingshot had a “real and disturbing impact on customers in the market place.”

The Judge also said this case was an “excellent illustration for the need for the Fair Trading Act” and that the “conduct encouraged more barriers to competition.”

Commerce Commission Consumer Manager Stuart Wallace said Slingshot’s actions in this case were very disappointing.

“This is unacceptable conduct by any trader, let alone one of Slingshot’s prominence” Wallace added.

“A particularly concerning aspect of this offending is that Slingshot was warned by the Commission for similar conduct in December 2009.”

The Commission has also laid charges against Power Marketing Limited, who acted as Slingshot’s marketing agent.

Power Marketing Limited is defending some of the charges faced, so no further comment can be made it this time.