The New Zealand Commerce Commission has accepted legally binding commitments from KiwiRail to provide compensation to customers impacted by cancellations of the Interislander ferry service due to mechanical breakdowns. This decision aims to simplify the refund process for affected consumers and ensure compliance with consumer law.

Competition, Fair Trading, and Credit General Manager Vanessa Horne emphasized that these commitments will help put money back into the pockets of consumers and clarify their rights regarding refunds. KiwiRail has agreed to compensate all affected customers, reassess previous compensation claims, and update its policies to align with consumer protection laws.

Earlier in 2023, mechanical issues with the Interislander ferries led to widespread cancellations, and KiwiRail had previously denied compensation requests, making misleading statements about consumer rights. The Commission found that KiwiRail's claims of being not liable for losses due to cancellations likely breached the Fair Trading Act and misled consumers about their rights under the Consumer Guarantees Act.

KiwiRail has now acknowledged that at least one mechanical breakdown could have been prevented, which would have entitled customers to compensation. The company has committed to treating delays and cancellations caused by mechanical faults as within its control, which is crucial for determining compensation eligibility.

In addition to the commitments, the Commission issued a warning letter to KiwiRail. The enforceable undertakings include a commitment to reconsider past and new compensation claims, acknowledge consumer rights clearly, and ensure ongoing compliance with relevant consumer protection laws.