Broadband provider TalkTalk has today been fined £3 million after the company incorrectly billed tens of thousands of consumers who were not receiving service. This follows an investigation by Ofcom into both TalkTalk and Tiscali in July 2010 after Ofcom received over 1,000 complaints about the companies, leading Ofcom to rule that the companies were in breach of General Condition (GC) 11.1 which relates to the billing of telecom services. Ofcom can fine up to 10% of a companies turnover, but in this instance has opted for a lesser fine. TalkTalk purchased Tiscali UK in 2009 for £236 million, a sale price far below the £600m Tiscali were originally looking for.
TalkTalk have already paid back over £2.5m in refunds and good-will payments to customers following complaints over billing, and Ofcom did not fine the companies at the time as the company had taken steps to try and sort out their billing problems. Ofcom deemed that sufficient work had not been completed however, as over 3,000 customers were still billed incorrectly between the 2nd of December 2010 and 4th March 2011.
"We are pleased that Ofcom has 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. The billing migration was completed last year and in the last 3 months Ofcom has received only 12 complaints on the issue. In addition, as announced in February, every customer impacted has been reimbursed and compensated with payments totaling over £2.5 million.
Last year I recognised that we needed to invest in our systems, processes and customer services and we are making significant progress. We have seen a 40% year-on-year reduction in customer service calls; Ofcom receives three times fewer calls about TalkTalk than they did at the height of the Tiscali integration; and our 5 million customers are more loyal and more satisfied than they were 12 months ago.
We are of course disappointed at the scale of the fine and feel it is a disproportionate penalty; however we are striving to continually improve and invest in customer experience and are pleased at the clear progress we are starting to make."Dido Harding, (CEO) TalkTalk Group PLC
TalkTalk may end up writing the fine down as part of the merger and integration costs as the company had to do considerable work to incorporate the Tiscali customers into the TalkTalk systems. Ofcom will continue to monitor the situation at TalkTalk although TalkTalk say that the billing issue in question is resolved.