ADSL or VDSL – partially upheld

Jurisdiction

This complaint is effectively that the Customer was sold a VDSL contract but were placed on ADSL instead. The allegation is about misrepresentation. 

The correct respondent in this complaint is the retail provider (scheme member) as the wholesale provider was not involved in the alleged misrepresentation. 

The scheme member refers to exclusion 8 of the Terms of Reference:

8:     relating to broadband performance, unless the complaint relates to a material failure of a broadband service to meet performance standards that have been represented to the Customer as the applicable standards for the broadband service, and which is covered by the complaints process set out in the TCF Broadband Marketing Code;

TDR agree that exclusion 8 applies in that the mediator and adjudicator is bound to not address broadband performance unless the complaint relates to a material failure of a broadband service to meet performance standards that have been represented to the Customer as the applicable standards for the broadband service, and which is covered by the complaints process set out in the TCF Broadband Marketing Code; however, that does not invalidate the misrepresentation aspect of the claim. 

The scheme member also submits that exclusion 10 applies. 

10:   to the extent allowed by law, a claim or claims for compensation based on indirect loss (including loss of profits), punitive damages, pain or suffering, loss of reputation, inconvenience, humiliation, mental distress, and costs involved in compiling or pursuing a Complaint;

The Customer seeks a return of monies paid for their contract to date. That does not reflect indirect costs such as for wasted time or stress etc. It is for the mediator and adjudicator to consider if a return of all or part of the monies paid for the service is warranted when considering the merit of the claim, and whether there is any tangible evidence of mis selling the product or misrepresentation.

The matter will proceed to mediation and adjudication. 

Dispute outcome

1. TDR’s final determination is that Customer’s complaint is partially upheld.
2. TDR finds that the Customer was misled as to what they were contracting to receive, and there was a technical breach of contract to that extent.

Dispute

3. The Customer’s position is that they entered into a 12-month fixed-term contract with the retail provider for VDSL broadband, but it was only after they had ended the contract with their previous retail provider that the new retail provider advised VDSL was not available in the Customer’s area, only ADSL.  The Customer considers that:

• (a) The advertising of the service was misleading, advertising a VDSL service being available despite that service not being an option at that address; and
• (b) A breach of contract with the retail provider not providing VDSL; and
• (c) The ADSL service received being substandard (less than average New Zealand ADSL speed standards).

4. In terms of the more specific background, the Customer applied for a copper-based VDSL service at his residential address.  This was requested online, TDR discuss this in more detail below.
5. The following day, the retail provider responded to the Customer to advise that VDSL was not a suitable option at that address, but it could offer ADSL.  That email is as follows:

From: [REDACTED] Broadband Provisioning 

To: [REDACTED]

Subject: Re: Your [REDACTED] Order – Update

Hi [REDACTED],

Thank you for your reply.

We've got the result of the pre-qualification check and it shows that VDSL is not suitable.

Would you like to have ADSL broadband instead? ADSL runs generally between 5 and 20Mbps download, with around 1Mbps upload. However, it is highly dependent on your distance from the local cabinet or exchange, and the quality of wiring in between. This plan will take approximately 5-7 days to get connected and is also $73 per month.

Please let us know how you wish to proceed.

Regards,

[REDACTED]

6. That same day the Customer responded agreeing to proceed with an ADSL connection:

From: [REDACTED]

To: [REDACTED]

Subject: Re: Your [REDACTED] Order - Update

Hi, [REDACTED],

Please proceed with your ADSL service. Thanks.

Kind Regards

[REDACTED]

7. The retail provider reports that the connection was completed a few days later.
8. The Customer reported a number of faults with the line. The retail provider summarised the reports and actions as follows:

• March 2023 – A fault was raised with the wholesale provider after reports of slow speeds. This was resolved by the wholesale provider repairing parts of the existing network to improve service. 
• April 2023 – A fault was raised with the wholesale provider after reports of the line disconnecting frequently. This was resolved by the wholesale provider repairing an underground service lead. 
• April 2023 – A fault was raised with the wholesale provider following reports that the speed of the connection has slowed again. This was resolved by the wholesale provider repairing a joint in a pillar outside of the address. 
• May 2023 – A fault was raised with the wholesale provider as the service stopped working. A technician was booked for the next day but cancelled prior as the service had started working again. 
• November 2023 – A fault was raised with the wholesale provider after slow speeds were reported. This was resolved by the wholesale provider repairing a wet joint in the connection. 
• September 2024- A fault was raised with the wholesale provider after reported slow speeds. The wholesale provider attended to this and repaired a fault in the pillar. They confirmed that the line may need more long-term work but was working as it was expected to. The tech submitted a plan to review the extension of the Fibre network, given the proximity of existing Fibre infrastructure in the area, as an alternative to copper in the future. 

9. In October 2024 the Customer cancelled the ADSL service with the retail provider, moving to another retail provider.
10. During October 2024 the Customer filed a complaint with the retail provider, consistent with the later complaint filed with TDR.  The retail provider considered the complaint, but did not consider there were grounds to accept any breach on its part.

Determination

11. In making this determination TDR has considered the information provided by the Customer and the retail provider, as well as: 

• Fairness in all the circumstances
• Any relevant legal requirements
• The Customer Care Code and its service standards, including position statements; and
• Any other relevant telecommunications code.

12. Having discussed this with the parties, TDR is satisfied that there is no settlement of the dispute.  Therefore, TDR make the following determination: The complaint is partially upheld.

Positions of the respective parties

The Customer’s position

13. The Customer considers that they had been misled by the retail provider, which advertised a 41 Mbps service with VDSL, stating the highest speed they had obtained was 12 Mbps, with an average of 8Mbps.
14. The Customer seeks an order that the retail provider do the following:

• (a) Refund the amounts paid for the ADSL service;
• (b) Refund mobile broadband charges; and
• (c) Refund the purchase of an alternative product.

14. The Customer states that they signed an agreement prior to March 2023 to receive VDSL.  The Customer states that they had googled broadband services and that is how they found the retail provider, the website confirmed the retail provider could provide VDSL and the price was right.  The Customer says that they completed the webform to apply for the service, understanding that they were contracting for VDSL.
15. The Customer has also reported slow ADSL speeds.

The retail provider’s position

17. The retail provider disputes that they have breached any obligation to the Customer, or misrepresented the product offered.
18. The retail provider disputes that they had contracted with the Customer to provide / receive a VDSL service.  After the wholesale provider advised that service was not available at the Customer’s premises, it offered a ADSL service, which the Customer accepted.
19. The retail provider states that its advertised speed for an ADSL connection is an average download speed of 10Mbps, and that the wholesale provider advertise that same service as having an average download speed of 9Mbps.
20. In terms of the quality or speed of the network, the network is owned by the wholesale provider, so it is not something that the retail provider can control.  All that the retail provider can do, is to act as an intermediary when issues are raised by its customers and forward those to the wholesale provider to be actioned. In this case the Customer has raised a number of faults, which were then forwarded to the wholesale who addressed them as set out above.
21. Nevertheless, the retail provider does not consider they have misrepresented the speed of the broadband service, and refer to its published terms and conditions, which confirm there is no committed maximum, no guarantee of a fault free service, and confirmation that broadband speeds can vary for many reasons.
22. The retail provider submit that:

The ADSL service was working as it should, and all faults reported by the Customer were raised to the wholesale provider to address in a timely manner. 

The retail provider do not guarantee that the service will work flawlessly, that speeds will never vary or that the service will never fault and have declined the Customers request for a full refund of the charges paid to the retail provider or compensation. 

The retail provider has refunded the Customer’s final month of service and offered to review any mobile data extras that align with the time any faults were raised. The Customer has not provided the information for this to be reviewed. 

Reasons for the decision

23. As set out above, there are three aspects to the Customer’s complaint, that is:

• (a) Misleading advertising that a VDSL service was being offered; and
• (b) A breach of contract with the retail provider not providing VDSL; and
• (c) The ADSL service being substandard.

24. As TDR will discuss below, TDR accept that when the Customer contracted for their broadband service they understood they were contracting for VDSL. Shortly after the contact was entered into, the retail provider confirmed to the Customer that only ADSL was available at the address. The Customer responded to the retail provider confirming that it should go ahead with the ADSL connection, and that is what occurred.

Did the retail provider act misleadingly?

25. TDR find that the offer made to the Customer by the retail provider, via its website, was misleading, for these reasons.
26. In considering the complaint, TDR have gone onto the retail provider website as if we were a potential customer, using the Customer’s residential address.  The site confirms that Broadband is available, and then asks that a plan be selected, however only one plan is available.
27. The offer indicates it to be a VDSL connection, there is no conditional statement or indication that VDSL may not be available. Any reasonable Customer would interpret the service offered as being a VDSL service.
28. If you click ‘choose this plan’, the following page asks further questions such as if a modem is being supplied, or the contract term (monthly or 12 monthly).  Those do not mention the modality, but box ‘5’ confirms that the monthly plan is “unlimited VDSL”.
29. Again, there is no conditional statement presented. Clicking ‘next’ takes you to the checkout, but again there is no conditional statement presented there. On the checkout page, you are asked to confirm that you have read the ‘the retail provider terms and conditions’ which is hyperlinked to that document.
30. TDR has reviewed the online terms and conditions but have been unable to find any statement that contracting to receive (in this case) VDSL, would be conditional on a later confirmation of availability at any particular address.
31. TDR find therefore, that a reasonable Customer who contracts with the retail provider for broadband at the Customers address, would have been given the indication they were contracting for VDSL.
32. The Fair Trading Act 1986 applies.  This legislation includes provisions around misleading and deceptive conduct, and confirms at section 9 that:

No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

33. Section 11 relates to misleading conduct in relation to services, confirming that:

No person shall, in trade, engage in conduct that is liable to mislead the public as to the nature, characteristics, suitability for a purpose, or quantity of services.

34. On the basis of TDR’s assessment of what is presented on the website and offer, TDR consider the information was likely to have misled the Customer as to the characteristic of the service they were contracting to receive – VDSL.
35. TDR record to be fair, that it is a defence to a breach of the Fair Trading Act to show that the misleading conduct occurred by reasonable mistake (section 44(1)(a)).  TDR have not received evidence from the retail provider around decision-making leading to the offer on the website, and such an inquiry would be outside the scope of the TDR process.[1] However, it is fair to recognise that if a strict approach to the Fair Trading Act provisions were applied, there may well be a defence that the retail provider could have provided to the breach.
36. Nevertheless, accepting on the face of it that the offer was misleading, then there are two primary remedies available, that is that the contract could be voided, and any losses sustained compensated.
37. TDR find however, the contract could not be voided, because when the retail provider found that VDSL could not be provided, it raised this with the Customer, and instead offered to supply ADSL, which the Customer accepted.  So once the Customer accepted the ADSL product, they entered into a new contract with the retail provider for that alternate product, which had the effect of cancelling the VDSL contract.  That means there is no continuing VDSL contract that TDR could void or order voidable.[2]
38. The question then is whether the misrepresentation caused the Customer a loss, and TDR find it did not.  The retail provider immediately notified the Customer it could not deliver a VDSL product, and then the Customer contracted for the ADSL product within a day.  TDR has seen no evidence of any loss for the Customer between the contracting for VDSL and contracting for ADSL.  TDR note here that the Customer had not yet been connected with any service, so there could be no difference in the service delivered.
39. For the above reasons, TDR find on the face of it that the Customer was misled as to what they were contracting for and make a finding to that extent.  However TDR find that the contract cannot be voided, and there is no loss to order compensation for.

Did the retail provider breach the Customer’s contract?

40. TDR find that the retail provider did breach its contract with the Customer around the provision of VDSL.
41. On the evidence available, TDR find that the retail provider made an offer to the Customer for VDSL broadband, and the Customer accepted that offer.  From that point the Customer had a contract with the retail provider to receive VDSL. However the retail provider did not deliver on that contracted service, and therefore a breach of contract arose.
42. While TDR find a breach does arise, TDR consider the contract became frustrated.  A frustrated contract is a contract that cannot be performed because of a matter outside the control of the parties.  In this case the network infrastructure is provided by the wholesale provider, which is an independent supplier, outside of the control of the retail provider. Because the network would not allow VDSL to be delivered, it could not be provided by the retail provider under the contract with the Customer, so the contact became frustrated.
43. During March 2023 the Customer entered into an alternate contract with the retail provider, to receive ADSL, and the VDSL contract came to an end that day, meaning the breach arose for one day.

Was the ADSL service substandard?

44. On the evidence, TDR find the ADSL service was not substandard.
45. While TDR accept there were faults, the terms and conditions recognise that faults may arise from time to time, that is the nature of an electronic service.  But TDR consider those were addressed, and the Customer has been compensated for the final month of their service charges for that.
46. However, TDR do not consider the service was unreasonably slow.  The Customer reports an average speed received of 8Mbps.  Given the contract was for an ADSL service, TDR do not consider that is unreasonably slow.
47. The retail provider states that their advertised ADSL download speed is 10Mbps, and the advertised speed from the wholesale provider is 9Mbps. In this case the Customer reports an average of 8Mbps, which is not significantly different to that average advertised by the retail provider. 
48. However, there was a specific range expressly stated (offered) to the Customer for ADSL speed.  In its March 2023 email to the Customer, the retail provider said:

Would you like to have ADSL broadband instead? ADSL runs generally between 5 and 20Mbps download, with around 1Mbps upload.

49. Plainly receiving 8Mbps falls within that 5-20Mbps range. TDR is not persuaded that the received ADSL speed is substandard.
50. However, TDR would agree with the Customer that if the question was directed to VDSL speeds, the indicative average download speed is 43Mbps, that would be well short of what they were receiving.  But again, the VDSL contract came to an end during March 2023, before any service was connected and delivered.  The Customer has only received a service via the ADSL contract, and TDR find this service was not substandard for the reasons explained above. 

Remedies

51. The Customer seeks an order that the retail provider do the following:

• (a) Refund the amounts paid for the ADSL service. 
• (b) Refund mobile broadband charges.[3]
• (c) Refund the purchase of the alternative product.

52. TDR has considered the Customer’s request, but find as follows:

• (a) There is no basis to order a refund of the service received under the ADSL contract.  During March 2023 the Customer was advised that VDSL could not be provided, ADSL was offered, and the Customer accepted the offer of ADSL.  For the reasons as set out above, the Customer entered a new contract during March 2023 for ADSL and they have been receiving a service consistent with the ADSL contract.
• (b) TDR can find no basis to reimburse any mobile broadband service.  Again the service delivered was consistent with what the Customer contracted to receive – ADSL.  While there were faults, that has been compensated for already.
• (c) TDR can see no basis to order a refund of the alternative product purchase price.  The Customer was receiving an ADSL service consistent with what they had contracted to receive.  If the Customer elects to move to another service, then they must carry the cost for that.

53. The Telecommunications Dispute Resolution Service operates under the Telecommunications Dispute Resolution Terms of Reference.  That document sets out the sorts of orders that TDR can make, which could include an apology.  With orders for the payment of money, TDR can make any order that the Disputes Tribunal could make, however, TDR cannot make an order around non-financial loss. Because TDR have been unable to identify any financial loss for the Customer arising from a breach by the retail provider, TDR cannot make any money order against the retail provider.
54. However, the retail provider has confirmed that the offer of settlement made, which is reimbursement of 6 months service charge remains, irrespective of the outcome of this adjudication.  That is a generous but fair position to take. What this means is that while TDR cannot order the payment to be made, the settlement offer remains, and if the Customer wishes to receive that, they would need to confirm that the continuing settlement offer is accepted.

Response to proposed decision

55. The retail provider advised they had no further comment.
56. The Customer provided extensive feedback, as follows:

Thank you for your time and for providing the proposed decision regarding my dispute with the retail provider. While I appreciate the findings, I respectfully submit that there are critical legal and factual issues that require reconsideration, particularly regarding the duration of the contract breach and the applicability of force majeure.

1. The Contract Breach Lasted Beyond One Day

The proposed decision concludes that the breach lasted only one day, after which I “entered into an alternate contract” for ADSL. However, this does not accurately reflect the nature of the situation:

• My acceptance of the ADSL service was not voluntary but a forced decision due to the retail provider breach. By the time I was informed that VDSL was unavailable, my previous broadband service had already been disconnected, leaving me with no practical alternative but to accept ADSL.
• A valid contract modification requires genuine mutual consent. In this case, I was not offered a fair choice—either accept a significantly inferior service (ADSL) at the same price or be left without broadband entirely. Such an arrangement is not a freely negotiated contract but one imposed under duress.
• Even if considered a new contract, it was entered into under misleading circumstances. The retail provider’s initial breach left me without reasonable alternatives, forcing continued reliance on them.

Thus, the breach did not last only one day—it persisted for as long as I was locked into an inferior service at the same cost, which continued for 18 months until I switched providers.

2. Force Majeure Does Not Apply

The proposed decision states that the contract was “frustrated” because the network infrastructure was provided by the wholesale provider, which was outside the retail provider’s control. However, this situation does not meet the legal criteria for force majeure (frustration of contract) for the following reasons:

2.1 Force Majeure Requires Unforeseeable and Unavoidable Events

• Force majeure applies to extraordinary, unforeseen, and unavoidable events (e.g., natural disasters, war, or government intervention) that make performance objectively impossible.
• However, the retail provider knew—or should have known—before contracting that VDSL was unavailable at my address. The inability to provide VDSL was not a sudden or unexpected event but a foreseeable issue that the retail provider failed to disclose before selling me the service.

2.2 The Retail Provider Had an Obligation to Verify Service Availability

• The retail provider was aware that VDSL was unavailable at my address at least 20 months ago when it attempted to modify the contract. Yet, even today, it continues to advertise that my address is eligible for VDSL despite knowing the service cannot be provided.  This ongoing misrepresentation goes beyond mere negligence—it strongly suggests a deliberate and intentional act to mislead consumers.
• Having access to accurate service availability data yet proceeding with the contract demonstrates that this was not a force majeure event but a case of negligence—or deliberate misrepresentation.
• According to New Zealand’s Fair Trading Act 1986, businesses must ensure their advertisements and sales representations are truthful. The retail providers ongoing false advertising could constitute a breach of consumer protection laws.

2.3 A Breaching Party Cannot Use Force Majeure as a Defense

• A party cannot invoke force majeure to excuse its own misconduct. If a company misrepresents its ability to provide a service, it cannot later claim frustration of contract when it fails to deliver.
• Accepting the retail providers argument would set a dangerous precedent—allowing broadband providers to sell services they know they cannot provide and then simply claim frustration when challenged.

3. Requested Reconsideration and Remedies

Based on the above, I respectfully request the following reconsiderations:

1. Reassess the duration of the breach. Instead of lasting one day, the breach persisted for as long as I was paying for an inferior service (ADSL) due to the retail provider’s failure to deliver the contracted VDSL.

2. Reject the retail providers force majeure argument. The inability to provide VDSL was foreseeable and avoidable, not an unforeseen external event.

3. Consider an appropriate remedy. Given the misrepresentation, I believe a refund for the full duration of my contract (not just six months) is warranted, along with coverage of the costs I incurred due to this issue.

57. TDR thank the Customer for their time to consider and respond.  TDR have considered those further submissions, but find they do not change TDR’s conclusions for these reasons:
    • (a) TDR is not persuaded that the breach was for more than one day.  TDR remain of the view that when the retail provider offered an alternate service (ADSL), and the Customer accepted that, it formed a new contract.  The Customer carried a common law duty to mitigate their loss from any contract breach, and entering into the ADSL contract was consistent with that duty.  The law would not support the Customer finding there was a breach of contract, and then taking no further steps for 18 months, while receiving an alternate service, and then claiming damages for that breach, in particular a 100% refund.
    • (b) TDR are certain there was genuine mutual consent around entering the ADSL contract.  The Customer was presented an option to contract for ADSL, but they did not have to accept it.  The Customer could have declined the offer, meaning they could then have cancelled the VDSL contract, or looked at other broadband options, such as returning to their prior or alternate provider.  TDR note that when ADSL was offered, it was open to the Customer to counteroffer or engage with the retail provider on what other options would exist. 
    • (c) Force majeure and frustration of contract are not the same legal concepts.  Frustration of contract arises in the general contract law that applies, and requires a significant change in circumstances that was not initially contemplated by the parties (VDSL not being connectable), impossibility to perform the obligation (the retail provider are not the network owner), and that neither party is at fault (the retail provider cannot control what services the wholesale provider provide).
    • (d) TDR agree with the Customer that the availability of VDSL at the property was misleading.  But that of itself would not mean TDR can make the orders they are seeking. Relief for misleading conduct is still limited to the actual losses incurred, and TDR find there were no such losses that can be compensated.  All TDR can do is order an apology.  In TDR’s view, the website should have made any service offer conditional on the network provider confirming availability.
    • (e) Again, TDR must emphasise to the Customer, that TDR cannot make money orders, as they are seeking, which do not relate to an actual financial loss.  The real problem they faced is that they have not proven that they had an actual financial loss. 
58. For those reasons, the decision of TDR remains unchanged.

Determination

59. The complaint is partially upheld.  TDR find that the Customer was misled as to the availability of VDSL, and there was a technical breach of contract when that was not delivered.  TDR direct that the retail provider provide an apology in writing to the Customer within 5 working days of the final decision if accepted.  Otherwise, as TDR have not identified a financial loss for the Customer, TDR make no other orders.

Future actions

60. A written apology is to be provided to the Customer within 5 working days around the misleading offer of VDSL and offering a contract on that basis.
61. The Customer to confirm if they wish to accept the retail provider continuing settlement offer.