Plusnet fined £880,000 for charging more than 1,000 ex-customers

Ofcom tells BT-owned broadband and landline provider there can be no excuses for charging users after they cancelled

Plusnet, the BT-owned broadband and landline company, has been fined almost £900,000 by Ofcom for continuing to charge more than 1,000 customers even though they had cancelled their accounts.

The telecoms regulator fined Plusnet £880,000 after an investigation found that the BT subsidiary broke a “fundamental billing rule”. An error in the company’s billing system meant cancelled lines were still recognised as “live”.

As a result, 1,025 customers who had cancelled either their landline or broadband service continued to be billed and were charged more than £500,000 in total.

Plusnet, which is based in Yorkshire, apologised, saying it was an “isolated historical issue”.

“We are very sorry and would like to apologise to the 1,025 customers affected,” said a spokeswoman for Plusnet. “We reported this ourselves to Ofcom, and made every effort to contact these customers to arrange a full refund before the investigation started. We would also like to reassure all customers this was an isolated historical issue and we have implemented a number of new robust measures to make sure this doesn’t happen again.”

However, Ofcom, which regulates the UK media and telecommunications industry, said there could be no excuses when it came to charging the public for services.

“There can be no margin for error, and no excuses, when it comes to billing customers correctly,” said Lindsey Fussell, consumer group director at Ofcom. “This fine should serve as a reminder to telecoms companies that they must adhere to Ofcom’s billing rules at all times, or face the consequences.”

Plusnet has made repeated attempts to refund all affected former customers by letter and phone but has only tracked down 356, paying out a total of £212,140, including 4% interest.

The rest has been donated to a dozen charities in Yorkshire, where the company is based.

“Whilst it is reassuring that Plusnet has sought to address the issue, that’ll be little comfort to the two-thirds affected that are still out of pocket,” said Richard Neudegg, head of regulation at price comparison service uSwitch. “Ofcom’s decision to hand an £880,000 fine to Plusnet is yet another reminder to providers that the regulator will not tolerate billing mistakes.”

He added: “Customers need to have confidence that providers are getting it right. For those that have ended their contract they need to be reassured that no further money will be taken for a service they have ceased to used.”

Ofcom said it cut what would have been a £1m-plus fine by 20% to “reflect Plusnet’s willingness to enter a formal settlement”.

The hefty fine is the latest headache for Gavin Patterson, the chief executive of BT, who has endured a torrid year that has included an accounting scandal at its Italian operation that wiped £8bn off its shares.

Earlier this month BT, which is set to introduce inflation-busting price rises for its customers, denied that it is forcing them to foot the bill to pay for its new £1.2bn Champions League football rights deal.

Patterson recently notched up a significant victory striking a deal to legally separate Openreach, which controls the UK’s broadband network, after almost two years of wrangling with Ofcom.

Ofcom, which has wanted to strengthen Openreach’s independence to promote competition and boost superfast broadband, has dropped its threat to call in European regulators.


Mark Sweney

The GuardianTramp

Related Content

Article image
Broadband users in line for millions in Ofcom compensation plan
Telecoms watchdog proposes making providers pay automatic compensation for 7.2m customer service failings each year

Mark Sweney

24, Mar, 2017 @9:31 AM

Article image
BT to spend £6bn on superfast broadband and 4G rollout
At least 10m homes and firms to get ultrafast broadband as BT hires 1,000 new engineers and pledges improved service

Julia Kollewe

05, May, 2016 @8:58 AM

Article image
Telecoms firms investigated for failing to warn UK customers of price rises
Ofcom inquiry follows complaints over lack of information on annual mid-contract price rises

Mark Sweney

01, Dec, 2022 @12:17 PM

Article image
Ofcom tells BT to open up infrastructure to rivals
Openreach should be run at ‘arm’s length’, regulator says in review, but BT should keep control of cable network – for now

Rob Davies

26, Feb, 2016 @7:28 AM

Article image
Does BT's Openreach deal mean faster broadband or higher prices?
Consumers will hope their service improves when the telecoms group moves its division into a new company

Patrick Collinson

10, Mar, 2017 @1:57 PM

Article image
Openreach overreach? Labour's free broadband plan faces hurdles
Nationalisation of BT’s broadband arm sounds easy in theory but in practice price and pensions are big obstacles

Nils Pratley

15, Nov, 2019 @6:08 PM

Article image
Fast broadband speeds not guaranteed by living in city centre, figures show

Research shows slowest area in London includes Barbican, next door to the City of London, while fastest is Charlton in Greenwich

Juliette Garside, telecoms correspondent

27, Mar, 2013 @8:38 PM

Article image
BT warns rural areas will suffer broadband delays unless government steps up
Philip Jansen fears residents risk ‘second-class’ status in full-fibre rollout until financial barriers are lifted

Mark Sweney

04, Feb, 2021 @11:28 AM

Article image
Ofcom: Broadband ISPs are pulling a fast one

Ofcom reported that nearly a quarter of broadband users said they received a slower service than expected, and this was the most common complaint to ISPs

Graeme Wearden

27, Jul, 2010 @4:59 AM

Path cleared for BT's superfast broadband

BT plan key part of government's project for British homes to have access to next-generation speeds

Chris Tryhorn

04, Mar, 2009 @12:01 AM