Telecom has once again been issued a warning by the Commerce Commission to stick to regulations, after another breach of the Fair Trading Act came to light.

Telecom confessed of breaching the act by charging $130,000 customers for dial-up internet connections despite informing them that it would be free of charge if they also signed up for a broadband connection.

Between the years 1999 and 2000, Telecom billed the customers for both dial-up and broadband, which resulted in over-charging of $9.5 Million, and this has been the company's eighth breach since 2003.

"The commission is increasingly concerned by the number of breaches under the Fair Trading Act committed by Telecom. I think that the commission expects better from the company, and New Zealand consumers do as well", Graham Gill said.

Since then, Telecom has refunded the money to customers, blaming the mix up on various administrative errors.

According to the Telecommunications Users Association, this is a "huge stuff up", and Telecom should have been slapped with substantial fines.