Internet service provider Xtra has been fined $45,000 for breaching the Fair Trading Act.
The charges follow three complaints by Xtra customers that the company made misleading claims that its pricing, service conditions or billing systems had been approved by the Commerce Commission.
Xtra, a division of Telecom, was convicted in Wellington District Court on Tuesday.
The court found Telecom had taken no effective action to avoid further similar breaches after the commission warned it over similar conduct in 2005.
The commission says the case serves as a reminder that businesses cannot claim endorsement or approval that they do not have.
Telecom says its call centre staff dropped the ball in relation to information it gave its internet customers about its pricing, services and billing systems.
A spokesperson, Mark Watts, says Telecom has improved training for its customer service representatives.