Microsoft Apologizes to New Zealand 365 Users Over Copilot Plan Confusion; Offers Refunds

Microsoft has formally apologized to its Microsoft 365 Personal and Family subscribers in New Zealand, as it failed to communicate changes introduced with its AI-enabled plans. The company has confirmed that it has started reaching out to affected customers this week, offering refunds and clarifying their options to switch to a non-Copilot alternative.

So, what’s the backstory? In October 2024, Microsoft rolled out new pricing for Microsoft 365 in New Zealand, citing the inclusion of Copilot AI tools as a for the increased price. However, many users were unaware that they could continue using a “Classic” version of the subscription without Copilot’s AI at the original price.

In a statement, Microsoft admitted the oversight, saying it “fell short of our standards” and that the company’s 35-year presence in New Zealand was built on trust and transparency. The tech giant added that it would learn from this mistake and improve its communication going forward.

The email sent to customers outlines two main choices. Here’s what Microsoft says in the public apology:

Option 1: Stay on Microsoft 365 [Personal/Family], your current plan

• Microsoft 365 [Personal/Family] includes the core Microsoft 365 apps plus our AI assistant Copilot and ongoing feature updates.
• Microsoft 365 [Personal/Family] renews at [$17/$23 NZD per month tax inclusive].
• If you wish to stay on Microsoft 365 [Personal/Family], no action is needed.

Option 2: Switch to Microsoft 365 [Personal/Family] Classic and receive a refund

• While Microsoft 365 [Personal/Family] Classic includes the core Microsoft 365 apps and regular security updates, it does not include our AI assistant Copilot and may not receive new feature updates.
• Microsoft 365 [Personal/Family] Classic renews at [$12/$18 NZD per month tax inclusive], the price you paid before the increase.
• If you want to continue using Microsoft 365 [Personal/Family] Classic after you switch plans, you’ll need to keep recurring billing enabled.
• If you switch to Microsoft 365 [Personal/Family] Classic by 31 December 2025, we’ll refund the difference in price between plans, starting from your first renewal date after 30 November 2024. We’ll process your refund to the payment method you use to subscribe within 30 days. Once the refund has been processed, it will be reflected in your Microsoft account. This refund option is only available to subscribers in New Zealand who receive this email and switch to the Microsoft 365 [Personal/Family] Classic plan by 31 December 2025.

Microsoft’s apology comes after 10 days of facing ACCC lawsuit in Australia, which argues that the company misled users about pricing and add-ons. This is just another instance of if customers can be aware, tech giants can’t mislead or pile add-on prices for something that they don’t want.

If you are reading this from New Zealand, please let u know which option you are planning to opt-for, in the comments below.