TalkTalk hit with largest UK telecoms fine
Nick Clark is the arts correspondent of The Independent. He joined the newspaper in June 2007, initially reporting on the stock markets. He has covered beats including the City, and technology, media and telecoms and made the switch to arts in December 2011. He has also contributed articles to the sports section.
Friday 19 August 2011
Ofcom has fined TalkTalk the largest amount ever for a British telecoms provider after it continued to charge thousands of customers who had cancelled its service.
The watchdog yesterday announced it had fined TalkTalk and its subsidiary Tiscali UK a total of £3m "for breaching consumer rules".
Dido Harding, the chief executive of TalkTalk, said in response that she was "disappointed" at the scale of the fine, adding she felt it was a "disproportionate penalty".
Months earlier, the company had agreed to pay out £2.5m to customers affected, blaming its billing systems. The problems arose after TalkTalk bought Tiscali in 2009 and attempted to move customers over to one platform.
The company claimed to have largely resolved the issues, but Ofcom received a further 3,000 complaints from angry consumers who had been charged for services despite closing their accounts. Morten Singleton, an analyst at Investec, said: "It is a sizeable fine, which speaks volumes about Ofcom's view of how seriously it takes the issue."
Yet the regulator did not impose the maximum penalty at its disposal, namely 10 per cent of the company'sturnover. Mr Singleton said: "It was mitigated by how TalkTalk reacted after it had a real problem getting customers over from one billing system to another." The fine is about 0.2 per cent of its most recent full-year turnover.
Ms Harding said she was pleased that Ofcom had recognised the "significant steps we've taken to solve this problem and has acknowledged that the issues surrounding the integration of the Tiscali business in 2010 are behind us." She added that in the past three months the regulator had received just two complaints a week related to the issue.
Ofcom opened its investigation into TalkTalk in July last year after receiving 1,000 complaints, warning the group that it faced a financial penalty if it continued to bill customers who had cancelled services.
At the time, the regulator's head of consumer affairs warned the company that its actions were "unacceptable, which is why we have ordered them to clean up their act or face the consequences".
TalkTalk then revealed it had identified 62,000 affected customers and paid £2.5m in refunds and goodwill payments but that its systems had continued to cause problems.
A spokeswoman for Ofcom said the investigation was now closed, although she added that the regulator would continue to monitor the company's progress.
The difficulties meant the company was named the most complained-about broadband and landline telecoms provider in a report drawn up by Ofcom earlier this year.
The data, which covered October last year to February showed 1.7 complaints per 1,000 customers. Among its rivals BT received 0.3 complaints per thousand, BSkyB had 0.4, and Virgin 0.2.
- 1 Fifty Shades of Grey trailer: First look at Jamie Dornan as Christian Grey
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 50 books for students to read this summer: From Ernest Hemingway to Gillian Flynn
- 4 Students offered grants if they tweet pro-Israeli propaganda
- 5 Israel has discovered that it's no longer so easy to get away with murder in the age of social media
Israel-Gaza conflict: Israeli targeting policy under scrutiny after shellfire hits a mother and child, a school full of refugees and a doctor’s home
Peaches Geldof: Her final day – and her fatal decision
Students offered grants if they tweet pro-Israeli propaganda
Iraq crisis: Isis orders Mosul shop keepers to cover mannequins
Israel-Gaza conflict: Israel may have committed war crimes, says UN human rights chief
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
£18000 - £25000 per annum + OTE £40,000: SThree: Huxley Associates are looking...
£20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...
£300 - £350 per day: Orgtel: Job Title: Business Analyst Rate: £300 - £350 per...