Slingshot pleads guilty, fined $250,000 for aggressive slamming tactics to gain customers

Slingshot, the telecommunications and broadband provider, has been fined $250,000 after pleading guilty to forcing customers unwittingly to take its service and then aggressively pursuing them for payment and referring some to debt collection agencies when they refused.

Competitor and industry major Telecom expressed delight at the result, which followed a guilty plea by Call Plus Services, trading as Slingshot, on 50 charges under the Fair Trading Act relating to its marketing tactics.

Slingshot advertises heavily on television, but the convictions relate to the activities of salespeople who switched people to Slingshot from other providers without their permission, leading to the enforcement action by the competition and fair trading watchdog, the Commerce Commission.

“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 said in a statement.

“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.”

Commerce Commission consumer manager Stuart Wallace said Slingshot’s actions were “very disappointing”, especially for a trader of Slingshot’s prominence, and because it was warned about similar behaviour in December 2009.

Slingshot had contracted a third party, Power Marketing Limited, to do the marketing in question. That case has yet to conclude and Power Marketing is defending some of the charges against it.

(BusinessDesk)