Plusnet has been fined £880,000 by UK telecoms regulator Ofcom after it continued to charge more than a thousand former customers following the cancellation of their contracts.
Remaining funds have been donated to a dozen local charities
Ofcom’s investigation found that the BT-owned provider continued billing a group of customers for cancelled landline or broadband services. The regulator concluded Plusnet breached a fundamental billing rule after 1,025 customers were overcharged by a total exceeding £500,000.
“There can be no margin for error, and no excuses when it comes to billing customers correctly,” said Lindsey Fussell, Ofcom’s Consumer Group Director. “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.”
The penalty comes months after Ofcom issued a £2.7 million fine to EE for similar overcharging, a move designed to deter other providers. “We monitor how companies bill their customers, and will not tolerate careless mistakes. Any company that breaks Ofcom’s rules should expect similar consequences,” Fussell added.
1,025 customers were overcharged by more than £500,000 in total
Unlike EE, which only reimbursed customers after regulator intervention, Plusnet made repeated efforts to refund affected former customers by letter and phone. The company refunded 356 ex-customers a total of £212,140, including four percent interest for each eligible customer.
“This is a major reminder to check your bank statements for unexpected transactions and to challenge anything that seems out of place,” commented Hannah Maundrell, Editor-in-Chief of Money. “Don’t let incidents like this put you off switching providers—issues are generally rare, and staying with the same supplier can often cost you far more in the long run.”
For those customers Plusnet could not contact, the unclaimed funds were donated to a dozen local charities. The company has also implemented measures intended to prevent similar billing errors in the future.
The £880,000 penalty must be paid to Ofcom within 20 working days and will be transferred to HM Treasury. Ofcom applied a 20 percent reduction to the penalty “to reflect Plusnet’s willingness to enter into a formal settlement, which will save public money and resources.”
Plusnet has acknowledged the breach and accepted full responsibility for the billing error.
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