Ofcom have fined TalkTalk and its UK subsidiary Tiscali £3 million. The fine is a result of an investigation into both companies after they had incorrectly billed over 65,000 customers for services they did not receive.
The investigation into the two companies began in July 2010 after Ofcom received over 1,000 complaints from customers who had been overcharged.
Ofcom is an independent regulator for the telecoms industry. They are able to issue fines to any company who are found to be in breach of telecoms rules, and those fines can amount to up to 10% of a company’s turnover. The £3 million fine issued to TalkTalk is the largest fine that Ofcom have had to issue to a telecoms company in their history.
Ofcom have indicated that the fine could have been much larger, but in this case they decided to take into account some steps taken by TalkTal and Tiscali to rectify the problems. They did confirm that the £3 million fine still reflected the seriousness of the company’s actions. TalkTalk have indicated their disappointment at the size of the fine that they have received. However, they are pleased that the independent regulator have taken into account the action they have taken to date; since the problems with incorrect billing arose, TalkTalk have paid over £2.5 million in refunds and goodwill payments to customers who were affected.
Ofcom confirmed that between the 1st January 2010 and the 1st November 2010, the two companies, TalkTalk and Tiscali UK, had issued incorrect bills to approximately 62,000 customers. Customers who had closed accounts were particularly affected. The error led Ofcom to contact both businesses in November 2010. They advised the companies to take
the appropriate steps to address the billing problems and gave them a deadline of the 2nd December 2010 to take appropriate action.
Ofcom indicated that whilst the two companies took some important steps to address the problem and comply with the rules, many more customers were billed incorrectly after the 2nd December 2010 and this continued until 4th March 2011. This led to a further 3,000 customers who had received incorrect bills.
TalkTalk have stated that the billing errors came about when they bought Tiscali UK in 2009.
They have also confirmed that the billing migration has since been completed and the problems should now have been resolved. The chief executive of TalkTalk, Dido Harding, confirmed that the company had recognised the need to invest in their systems, processes and customer services. She also indicated that they have been making significant progress in these areas.
Ms Harding pointed out that the number of complaints that Ofcom receive regarding the company have significantly reduced. She also indicated that the 5 million TalkTalk customers are now more satisfied than they were a year ago and the company is now seeing increased loyalty in their customers.
However, Ofcom confirmed that in April this year, TalkTalk were the most complained about telecoms firm in the entire UK broadband and land line industry.