Mobiles giant fined for charging 62,000 customers too much

OFCOM has slapped a £3 million fine on telecoms provider TalkTalk and one of its subsidiaries after they wrongly billed tens of thousands of customers for services they had not received.

Tiscali UK and its parent company TalkTalk were both fined more than £1.5m each following an investigation by the watchdog which found that 62,000 incorrect bills had been issued – many to people who had closed their accounts.

Ofcom opened an investigation into the pair in July 2010 following complaints from more than 1,000 consumers over bills issued between 1 January and November 2010.

The watchdog issued a legally-binding notification in November, warning steps had to be taken to sort out the billing problems by 2 December.

But, despite taking some important steps to comply with the rules, such as changing customer records management systems, almost 3,000 consumers were still incorrectly billed between 2 December last year and 4 March.

Ofcom said it had issued the £3m financial penalty to “reflect the seriousness of their breach of the rules and to act as a deterrent.”

Tiscali was bought by TalkTalk in July 2009, and has since been rebranded as TalkTalk.

“Ofcom considers this to be a serious breach of the rules,” said the regulator. “However, Ofcom is issuing TalkTalk and Tiscali UK with a lower penalty than they might otherwise have been given, had they not taken steps towards complying with the rules, and taken action to remedy the harm they caused.”

The watchdog is allowed to fine companies that breach telecoms rules up to 10 per cent of their relevant turnover.

Richard Lloyd, executive director of Which?, said companies should take responsibility to respond to customer complaints without the regulator having to get involved.

“It’s good to see a regulator showing its teeth – a £3 million fine clearly shows Ofcom is ready to take meaningful action against telecoms companies that break the rules,” he said.

Brian Boroff, managing director of mobile phone comparison site Mobilife warned customers to keep a close eye on their bills.

“This is a reminder to us all that even the larger telecom companies can make errors in their billing,” he said. “It’s not just accidental mistakes that need to be watched out for – being on the wrong deal in the first place for your usage can cost you hundreds of pounds a year.”

Dido Harding, chief executive of TalkTalk Group, said the regulator had received only 12 complaints on the issue in the past three months.

“We are pleased that Ofcom has recognised the significant steps we’ve taken to solve this problem and has acknowledged that the issues surrounding the integration of the Tiscali business in 2010 are behind us,” she said.