O2 fined £10.5m for overcharging departing customers
Around 140,000 customers overpaid, according to Ofcom.
Mobile network O2 has been fined £10.5 million by British telecommunications regulator Ofcom for overcharging more than 140,000 customers.
According to Ofcom, an investigation revealed issues with the way O2 billed customers who left the provider between 2011 and 2019.
The regulator found that over 250,000 subscribers were billed incorrectly (amounting to £40.7 million) by O2 for eight years. Of those customers about 140,000 actually paid the extra charge, totalling around £2.4 million, to O2, Ofcom said.
Mobile carriers are required to issue a final bill to customers leaving the provider, specifying all remaining charges and fees the customers have to pay before the company closes their accounts.
Ofcom says its investigation found an error in the way O2 calculated final bills for its pay monthly mobile customers, which led to nearly 140,000 individuals billed twice for some monthly charges.
O2 first identified issues with its billing processes in 2011, but continued to overcharge customers after efforts to fix the issue failed.
The Telefónica-owned mobile network says it has refunded many of the affected customers in full, plus an extra 4 per cent on top. The company has also promised to make a donation equivalent to the overcharged amount to a charity for all former customers whom it has been unable to contact.
Gaucho Rasmussen, Ofcom’s enforcement director, described the O2 overcharging as “serious breach” of Ofcom’s rules.
Rasmussen said the regulator “will step in if we see companies failing to protect their customers”. He added that Ofcom is satisfied with O2 which has refunded affected customers and has taken steps to “prevent this happening again”.
O2 has apologised to customers impacted, saying it was “disappointed by this technical error”.
Ofcom said the size of the fine was reduced from a potential £15m due to O2’s co-operation in the case.
The regulator’s decision to fine O2 has come at the time when another British telecommunications firm – BT – has been facing a class action lawsuit at the Competition Appeal Tribunal (CAT) over claims that the company overcharged more than 2.3 million residential, landline-only customers for nearly eight years.
The case was filed in January by Justin Le Patourel, a representative of CALL (Collective Action on Landlines), seeking compensation for affected customers.
If successful, the claim could result in compensation of between £200 and £500 for each affected customer, up to a total of an estimated £500 million, according to CALL.
In 2017, BT was fined £42m by Ofcom and was told to pay £300m back to other telecommunications firms after the regulator found that the company had abused its market position.
Originally published by
Dev Kundaliya | February 15, 2021
computing
