Ofcom fines TalkTalk £3m over incorrect billing

The regulator said the heavy fine, which follows the telco's persistent billing for services it did not actually provide, shouldact as a 'deterrent'

Ofcom has fined TalkTalk and its Tiscali UK subsidiary for persistently billing tens of thousands of customers for services they did not receive.

Ofcom sign

Ofcom has fined TalkTalk and its Tiscali UK subsidiary £3m for persistently billing tens of thousands of customers for services they did not receive. Photo credit: Jon Yeomans

The regulator first censured the companies for the incorrect charges in November, after which TalkTalk and Tiscali gave over 65,000 affected customers a total of £2.5m in refunds and goodwill payments. On Thursday, Ofcom levied an additional £3m fine, saying the telecoms firms continued to bill customers for non-existent services even after being told off for doing so.

"While TalkTalk and Tiscali UK did take some important steps to comply with the rules, such as making changes to their customer records management systems, they still incorrectly billed almost 3,000 consumers between 2 December, 2010 and 4 March, 2011," Ofcom said in a statement.

The regulator said the size of the fine was "to reflect the seriousness of their breach of the rules and to act as a deterrent to them and other telecoms companies who must comply with the rules".

However, Ofcom said the fine would have been even greater if TalkTalk and Tiscali UK had not taken steps to fix their systems and compensate customers.

Despite being named in Ofcom's statements, Tiscali UK does not technically exist anymore. It was bought by TalkTalk's then-parent company, Carphone Warehouse, in 2009. Its operations were merged into TalkTalk, which was then itself demerged from Carphone Warehouse in 2010.

On Thursday, TalkTalk chief executive Dido Harding said in a statement that the company was pleased Ofcom had recognised the steps taken to fix the problems and "acknowledged that the issues surrounding the integration of the Tiscali business in 2010 are behind us".

Complaining that TalkTalk was "disappointed at the scale of the fine and [felt] it is a disproportionate penalty", Harding noted that every affected customer had been reimbursed, and that Ofcom had received a mere 12 complaints regarding the issue over the last three months.

"Last year I recognised that we needed to invest in our systems, processes and customer services — and we are making significant progress," Harding said. "We have seen a 40-percent year-on-year reduction in customer service calls; Ofcom receives three times fewer calls about TalkTalk than they did at the height of the Tiscali integration; and our five million customers are more loyal and more satisfied than they were 12 months ago."

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