TalkTalk pays out £2.5m after breach

Telecoms group TalkTalk has paid out £2.5m after billing consumers for services they had cancelled, but the regulator warned it could still face further action as complaints continue to flood in.

Ofcom launched a probe into TalkTalk and Tiscali – which TalkTalk bought in 2009 – last summer after more than 1,000 complaints from consumers claiming to have been incorrectly billed after cancelling their services.

The companies were given a deadline of the beginning of December to stop the practice and pay refunds.

It emerged yesterday that they had compensated 62,000 former customers. While the companies have taken "significant steps" to fix the problem and comply with regulations, Ofcom said, the complaints have continued. This is likely to mean further payouts.

The communications watchdog added: "If the investigation reveals that TalkTalk or Tiscali UK have continued to breach the regulations, they could still face further enforcement action including a financial penalty."

The regulator has no powers to impose a financial penalty on a company that has taken steps to address the problem after an investigation is launched. But the Government is consulting on changes to the law, which would allow Ofcom to issue a financial penalty, whatever the remedy.

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