TalkTalk hit with largest UK telecoms fine

 

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.

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
peopleMathematician John Nash inspired the film Beautiful Mind
News
Richard Blair is concerned the trenches are falling into disrepair
newsGeorge Orwell's son wants to save war site that inspired book
Life and Style
Audrey Hepburn with Hubert De Givenchy, whose well-cut black tuxedo is a 'timeless look'
fashionIt may be a paradox, but the industry loves it
Arts and Entertainment
The pair in their heyday in 1967
music
Life and Style
fashionFrom bathing dresses in the twenties to modern bikinis
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine