Friday, December 9, 2022

O2 UK slapped with £10.5m for overcharging customers

O2 UK £10.5m for overcharging customers

British telecoms regulator Ofcom has fined O2 UK £10.5m late last week for overcharging its customers over an eight-year span, as the regulatory authority identified issues within its billing processes dating back to 2011.

According to the watchdog, its rules require telecoms companies to provide customers with accurate bills and charges. In 2019, Ofcom opened an investigation into potential issues with the way O2 was billing customers who were leaving the provider.

Naturally, when a customer leaves a mobile provider, the company provides a final bill setting out any remaining fees and charges the customer must pay before their account is closed. Between at least 2011 and 2019, an error in the way O2’s systems calculated the final bills for pay monthly mobile customers meant many people were billed for some charges twice, Ofcom highlighted.

“In total, over 250,000 customers were billed for these incorrect charges, amounting to £40.7m. Around 140,000 customers actually paid the extra charges, paying a total of £2.4m,” the regulator said in a statement.

O2 has accepted the findings of the investigation and is currently refunding the customers affected in full for the extra charges they paid, plus an additional 4 percent.

For those customers that O2 has not been able to reach, the company has committed to make a donation to charity for the equivalent amount of money those customers were overcharged.  It has also changed its billing processes to prevent this issue arising again.

“Mobile customers trust their provider to bill them correctly and fix any errors as quickly as possible. But these billing issues continued for a number of years without sufficient action from O2, and thousands of customers were overcharged as a result,” Gaucho Rasmussen, Ofcom’s Enforcement Director said in the statement.

A spokesperson from O2 told reporters that the operator is proactively driving over £168m value back to their customers in the last year alone, as they are “disappointed by this technical error and sincerely apologies to customers impacted.”

However, O2 UK isn’t the only operator facing scrutiny from the country’s regulator.

Earlier in the year, British telecom giant BT was slapped with a class action lawsuit over allegations that it has been overcharging elderly customers for eight years. The lawsuit came in the wake of a 2017 report from Ofcom which found that the operator had been overcharging 2.3 million of its landline customers since 2009.

London-based law firm Mishcon de Reya has filed a £600 million litigation to the Competition Appeal Tribunal (CAT). If successful, this would result in each of the 2.3 million overcharged customers receiving payments of £500 each.

The case represents customers who purchased a BT landline contract but did not also take BT broadband or pay TV packages.