Mobile company Giffgaff has been fined £1.4 million by Ofcom over billing mistakes that saw millions of customers overcharged.
An investigation conducted by the regulator found that an error in Giffgaff’s billing system led to around 2.6 million customers being overcharged almost £2.9 million in total.
Gaucho Rasmussen, Ofcom’s director of investigations and enforcement, said the mobile company made “unacceptable mistakes” that affected millions of customers.
“Getting bills right is a basic duty for every phone company. But Giffgaff made unacceptable mistakes, leaving millions of customers out of pocket,” he said.
“This fine should serve as a warning to all communications providers: if they get the bills wrong, we’ll step in to protect customers.”
- Visa security flaw allows hackers to bypass contactless limit
- ScotlandIS hires Jane Morrison-Ross as CEO
Giffgaff, which is owned by Telefonica UK, has already refunded around £2.1 million to affected customers. The firm also confirmed that, in lieu of customers it has been unable to trace and refund, money has been donated to charity.
Ofcom’s fine also incorporates a 30% reduction as the company agreed to settle the case. The regulator also said that it recognised Giffgaff reported the matter promptly “when it realised its mistakes and took active steps to fix the problem”.
What went wrong?
Giffgaff customers who bought its ‘goodybag’ bundle were overcharged, Ofcom said. Customers are able to pre-pay for bundles of voice minutes, text messages and data as part of the promotional bundle.
Ofcom rules mean that telecoms providers must bill customers accurately for the services they use. However, in this instance, millions of customers who purchased the bundle while using their pre-paid credit were overcharged.
The gaff was due to a delay in the company applying the bundle to their accounts, Ofcom said. This meant that any voice calls customers were making – or the data they were using at the time, came out of their pre-paid credit.
“These services should have been free immediately from the point the bundle was purchased – so the customers were effectively charged twice,” Ofcom confirmed in a statement.