TalkTalk and Tiscali in breach of Ofcom rules over incorrect billing
Tuesday 02 November 2010 11:13:03 by John Hunt

TalkTalk and Tiscali UK (owned by TalkTalk) have today been given a slap on the wrists by Ofcom after they have breached telecoms rules in relation to consumer billing. Ofcom have received over 1,000 complaints so far this year about bills from the two companies for services that have not been provided and Ofcom have given the TalkTalk Group a month to get things straightened out. The relevant rule that has been breached is General Condition 11.1 which states:

"The Communications Provider shall not render any Bill to an End-User in respect of the provision of any Public Electronic Communications Services unless every amount stated in that Bill represents and does not exceed the true extent of any such service actually provided to the End-User in question."

Consumers reported to Ofcom that they had received bills from the companies after cancelling their telephone or broadband service, whilst some overpaid by over £600 pounds. The most likely reason for this is the mess of account and billing systems that will have been in place over time as Tiscali acquired various broadband companies including Pipex, Nildram, and Freedom2Surf amongst others. With TalkTalk and Tiscali merging these together through this year, it's unsurprising that some errors have occurred. One can't help but wonder if this was one factor which lead to the drawn out sale of the Tiscali business, putting some bidders off due to the huge integration process required.

Ofcom believes the scale of the problem is too severe and expects the TalkTalk Group to implement new systems and training to stop old customers receiving bills. They will also need to rectify problems arising from the billing which will include (but not limited to):

1. establishing a specialist team within the TalkTalk Group to which any complaints about bills for services not provided to end-users are escalated, on receipt, for resolution;
2. identifying all end-users of the TalkTalk Group who have been billed by it for services it had not provided to them in the period between 1 January 2010 to the date of the Notification ("the affected end-users") and writing to these end-users informing them of any monies owed to them, providing the contact details of the specialist TalkTalk Group team (referred to in (a) above) and setting out the steps required to secure payment of any sums due;
3. suspending all further billing of, and stopping any debt collection activity in relation to, the affected end-users;
4. providing refunds of all sums paid by end-users to the TalkTalk Group for which it had billed them in contravention of GC11.1;
5. in relation to any affected end-user whose credit rating has been adversely affected by steps taken by or on behalf of TalkTalk Group, or by any party, in connection with its contravention of GC11.1, taking the necessary steps to repair the affected credit rating, including but not limited to applying to have any relevant court judgment set aside and notifying relevant credit reference agencies;
6. in relation to any affected end-user against whom TalkTalk Group has instituted legal proceedings to claim monies purportedly owed, withdrawing forthwith from such legal proceedings, and paying the end-user’s reasonable legal costs in resisting the claim; and
7. paying an appropriate amount to affected end-users in respect of annoyance, inconvenience or anxiety to which they have been put.

"Ofcom is determined to stand up for consumers and take action against companies that break the rules.

Our investigation into TalkTalk and Tiscali UK found that they had billed customers for cancelled services; this is unacceptable which is why we have ordered them to clean up their act or face the consequences."

Claudio Pollack, (Director of Consumer Affairs) Ofcom

"We identified an issue with the cancellation process for ex-Tiscali customers caused by an error on a legacy billing system. We are resolving this by migrating all ex-Tiscali customers onto one network and billing system which will allow us to process cancellations much more effectively. TalkTalk Group has co-operated fully with Ofcom's investigation and we apologise for the inconvenience caused to this limited group of former customers."

Statement received from TalkTalk

Ofcom will require TalkTalk and Tiscali to comply by the 2nd of December or face further enforcement, and with the maximum penalty being a fine of 10% of relevant turnover, there is definitely an incentive for them to sort this out quickly.