Vodafone rapped with RECORD £4.6m fine for failing customers

Biz apologises and blames issues with its IT system


Vodafone has been fined £4.6m for failing customers for mis-selling to customers, inaccurate billing and poor complaints handling.

The regulator Ofcom imposed the fine today following two investigations into the business which began in June last year.

Vodafone said the issues were due to errors "during a complex IT migration", which involved moving more than 28.5 million customer accounts and almost one billion individual customer data fields from seven legacy billing and services platforms to one.

The IT project began at the end of 2013 and was the largest of its kind ever undertaken by Vodafone anywhere in the world, it said.

Ofcom found that 10,452 pay-as-you-go customers lost out when Vodafone failed to credit their accounts after they paid to "top-up" their mobile phone credit, collectively losing £150,000 over 17 months.

Vodafone failed to act quickly enough to identify or address these problems, it said. The company only took effective steps to stop pay-as-you-go customers from paying money for nothing (and reimbursed them) when the regulator intervened.

Consequently the biz has been fined £3.7m for taking pay-as-you-go customers’ money without providing a service in return.

In a second investigation, the regulator found that Vodafone had failed to comply with our rules on handling customer complaints. Vodafone’s customer service agents were not given sufficiently clear guidance on what constituted a complaint and deal with them in a timely manner, it said.

Customer were not told in writing of their right to take an unresolved complaint to a third-party resolution scheme after eight weeks.

Ofcom slapped it with a £925,000 for the flaws in its complaints handling processes.

The money will be passed on to HM Treasury. As part of this agreement, Vodafone admits the breaches.

In a statement, Vodafone said: "We deeply regret these system and process failures. We are completely focused on serving our customers: everyone who works for us is expected to do their utmost to meet our customers' needs, day after day, and act quickly and efficiently if something goes wrong.

"It is clear from Ofcom's findings that we did not do that often enough or well enough on a number of occasions. We offer our profound apologies to anyone affected by these errors.

It has also reimbursed all customers who faced financial loss, except for 30 it could not identify, and made a donation of £100,000 to charity.

The IT failure involved was resolved by April 2015 - approximately 11 weeks after senior managers were finally alerted to it - with a system-wide change implemented in October 2015 that - as Ofcom acknowledges - means this error cannot be repeated in future, said the business.

It has conducted a full internal review of this failure and said a failure of this kind should have been identified and flagged to senior management for urgent resolution much earlier.

Lindsey Fussell, Ofcom Consumer Group Director, said: “Vodafone’s failings were serious and unacceptable, and these fines send a clear warning to all telecoms companies.

“Phone services are a vital part of people’s lives, and we expect all customers to be treated fairly and in good faith. We will not hesitate to investigate and fine those who break the rules." ®

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