TalkTalk and Tiscali have been hit with a big fine from Ofcom, after wrongly billing tens of thousands of customers for services they never received.
The £3m penalty was slapped on the companies following their failure to clean up their billing systems.
The communications watchdog said this morning that the two telcos are required to pay up within 30 days of receiving the hefty penalty notification.
Ofcom, which has the power in theory to fine a company 10 per cent of its turnover, will pass the fine payment on to HM Treasury.
According to the regulator:
Ofcom is issuing TalkTalk and Tiscali UK with a lower penalty than they might otherwise have been given, had they not taken steps towards complying with the rules, and taken action to remedy the harm they caused to consumers.
The firms were warned in November 2010 – via a legally binding notification – to either obey the rules or pay a fine.
TalkTalk and Tiscali were given until 2 December to sort out their systems. They were ordered to stop setting bailiffs on people still supposedly owing money due to dodgy billing and inform credit agencies in order to restore credit ratings of customers wrongly accused of not paying bills.
However, Ofcom confirmed today that – despite the warning late last year – both companies had continued to breach consumer rules.
The watchdog said that TalkTalk and Tiscali had wrongly issued bills to customers for services they not received. Worse still, it billed punters who closed their accounts.
Ofcom found 62,000 cases between 1 January and 1 November 2010.
The telcos took steps to comply with the rules, it noted, but they wrongly billed nearly 3,000 customers between 2 December last year and 4 March 2011, hence the financial penalty.
Ofcom said it hoped the harsh fine would "act as a deterrent" to TalkTalk and Tiscali as well as other telecom outfits in the UK.
It said the fined companies had paid over £2.5m in refunds and goodwill payments to more than 65,000 customers who were incorrectly billed.
TalkTalk has had a bad year with the regulator. Last month, Ofcom published a customer satisfaction survey which put the company at the bottom of the list.
In April it was confirmed that Ofcom had received more complaints about TalkTalk than any other telco from UK broadband and landline customers between October 2010 and February this year. ®