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.
