Telecoms firm TalkTalks its way into £3m fine

The company has been fined by Ofcom after it incorrectly billed more than 65,000 customers. Whoops...

by Emma Haslett
Last Updated: 18 Aug 2011
Following EDF Energy’s admission yesterday that it had managed to overcharge 100,000 of its customers, today it’s the turn of phone company TalkTalk (and its subsidiary Tiscali), which has been slapped with a £3m fine after it mistakenly billed more than 65,000 customers who had already closed their accounts. It’s the largest fine ever handed out by communications watchdog Ofcom to a telecoms firm. And although TalkTalk insists it’s done its part to minimise the impact on customers who were affected, the watchdog says it’s time for telecoms firms everywhere to get their acts together.

By the sounds of things, it’s no surprise TalkTalk achieved the rather dubious accolade of most-complained about telecoms firm in the UK when the rankings were published in April this year by Ofcom. Apparently, it issued 62,000 bills to customers who had closed their accounts between 1 January and 1 November 2010. Then it did it again – between 2 December 2010 and 4 March 2011, bringing the total number of irate calls to Ofcom from customers to the not insignificant figure of 1,000.

TalkTalk insisted that it was all a mistake, and that it was merely a result of problems which arose from integrating Internet Service Provider Tiscali UK, which it had bought in 2009, into its service. It added that it’s already had to pay (rather substantially) for its little mishap: apparently, it’s shelled out more than £2.5m in refunds and ‘goodwill payments’ to affected customers, and taken drastic steps to make sure this sort of thing doesn’t happen again. ‘Ofcom receives three times fewer calls about TalkTalk than they did at their height of the Tiscali integration,’ said CEO Dido Harding (read MT’s recent interview with her here). Although, presumably, the ideal number of complaints to Ofcom should be ‘none’. Baby steps…

To be fair to TalkTalk, making a phonecall happen is relatively easy – billing, though, is widely acknowledged to be the hardest part of running a phone company. Add in the challenges of integrating a new acquisition, and you can see where the problems have arisen. But the watchdog said the scale of the fine reflected the ‘seriousness’ of TalkTalk’s error, adding that its severity is designed to act as a sort of warning to other telecoms companies that they ‘must get their house in order’ on the billing issue. With that sort of cash at stake, we don’t imagine it’s a mistake rivals will emulate in a hurry…

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