Ofcom fines Plusnet £880,000 for overcharging customers who had left
Over 1,000 people who had been Plusnet customers were overcharged by the broadband provider Ofcom has determined after a lengthy investigation with the 1,000 customers affected covering a four year period from May 2011 to September 2015.
Ofcom has now levied a fine after closing the investigation, and this means the Treasury gains £880,000 as a result of the fine Ofcom has imposed, assuming Plusnet pay it within 20 days. In addition Plusnet did make efforts to track down those owed money (over £500,000) and some 356 customers were refunded £212,140 (figure includes 4% interest), in the case where contact was not made with old customers the balance has been donated to a dozen local charities.
The fine would have been another 20% higher but apparently Plusnet was willing to enter into a formal settlement which reduced the fine, as by playing ball it saved time and money on the side of Ofcom.
The investigation started by Ofcom on 27th May 2016 and while the Ofcom investigation talks of 'the telecoms company broke a fundamental billing rule by continuing to charge a group of customers for landline or broadband, after they had cancelled their service' it is not totally clear if they mean people left via the preferred migration route or this just affected people ceasing their broadband due to moving out of a property.
We feel we should highlight one aspect of changing provider, the Ofcom mandated migration process means you do not need to contact your old provider when switching provider (and the switch is to a provider that runs over the Openreach local loop), and in cases where people have done this some providers actually interpret the contact as the consumer trying to cancel the service. Why is this distinction important? Because a migration is cheaper than a cancellation and provision due to the cease fees that a cancellation can trigger, additionally cease and provide can mean you are without broadband for an extended period compared to the 30 minutes to 1 hour for a migration. For those worried about billing, the solution is to allow your migration to go through and double check the leaving letter you will have received from your old provider to make sure any amounts owed are correct and then once the switch has completed check that any payments taken are correct.