19th Aug 11
TalkTalk fined £3m over wrong billing
by Katie Naylor
Running up a bill: TalkTalk and Tiscali continued to issue wrong bills despite Ofcom warning
Running up a bill: TalkTalk and Tiscali continued to issue wrong bills despite Ofcom warning
Ofcom has given telecommunications company TalkTalk a fine of £3m for sending customers bills for services they did not receive.
The communications watchdog revealed that an investigation into to both TalkTalk and Tiscali UK in July last year found that both companies had wrongly billed people, particularly customers who had already closed their accounts. TalkTalk acquired Tiscali in July 2009 and rebranded it unter the TalkTalk name.
Ofcom said that it begun its investigation into the two companies last year after receiving over 1,000 complaints. It discovered that the firms wrongly issued more than 62,000 bills between January and November last year.
In November Ofcom issued a legally-binding notification warning that action needed to be taken in order to amend the billing issues by 2 December. However, the watchdog said that even though the company made some important advances to comply with the regulations, including altering customer record management systems, nearly 3,000 consumers were still wrongly billed between 2 December and 4 March.
It said that it handed out a £3m financial penalty in order to reflect how serious their breach of the regulations were and to act as a future deterrent to them and other telecommunications firms who have to comply with the regulations. TalkTalk had until 2 December, 2010, to refund customers and Ofcom said that over £2.5m had been handed out in refunds and goodwill payments to over 65,000 consumers who were affected.
Ofcom has the power to fine companies by as much as 10 per cent of their turnover if they breach telecom rules. In a statement the watchdog said that it considers this as a serious breach of the rules, but that it is issuing a lower penalty to TalkTalk and Tiscali UK than they may have been given if they had not taken action towards complying with the regulations, and taken steps to remedy the harm which consumers were caused. The fine, which will be passed to HM Treasury, must be paid within 30 days.
TalkTalk’s CEO Dido Harding said that the company was pleased Ofcom recognised the steps they had taken to rectify the issue and has acknowledged that certain issues surrounding the Tiscali business’s integration last year are now behind them. He went on to state that the billing migration was completed in 2010 and Ofcom has only received 12 complaints on the issue during the last three months.
Mr Harding went on to say that, as announced in February, each customer who was impacted has been repaid and compensated with total payments reaching £2.5m He added that he recognised last year that they needed to invest in their systems, customer services and processes, and they are now making significant progress.
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