Ofcom Hits O2 With £10.5 Million Fine For Overcharging

Mobile operator O2 has been issued a multi million pound fine by the UK communications regulator Ofcom.

Ofcom announced that O2 broke its rules by failing to provide customers with accurate bills, and that over 140,000 customers were overcharged when leaving O2 between 2011 and 2019.

Ofcom has been rigorous in enforcing changes in the mobile sector over the years. In 2017 for example, it announced that mobile users would be able to switch operators using a single text message. That rule change became law in 2019.

Billing errors

Ofcom said that it began an investigation in 2019, into potential issues with the way O2 was billing customers who were leaving it.

Ofcom said that when a customer leaves a mobile provider, the operator provides a final bill setting out any remaining fees and charges the customer has to pay before their account is closed.

“Between at least 2011 and 2019, an error in the way O2’s systems calculated the final bills for pay monthly mobile customers meant many people were billed for some charges twice,” said the regulator.

“In total, over 250,000 customers were billed for these incorrect charges, amounting to £40.7m,” it said. “Around 140,000 customers actually paid the extra charges, paying a total of £2.4m.”

O2 had initially identified issues with its billing processes in 2011, but efforts to address these problems were not successful and customers continued to be overcharged.

In the end, Ofcom found that O2 had breached its rules and fined the operator £10.5m.

Customer refund

O2 has accepted the findings of the investigation.

And the good news is that O2 has refunded the customers affected in full for the extra charges they paid, plus an additional 4 percent.

And for those customers that O2 has not been able to reach, the operator has committed to make a donation to charity for the equivalent amount of money those customers were overcharged.

O2 has also apparently changed its billing processes to prevent this issue arising again.

Any customers who have evidence they were impacted by these billing errors, and have not been refunded, are advised to contact O2 directly.

“Mobile customers trust their provider to bill them correctly and fix any errors as quickly as possible,” said Gaucho Rasmussen, Ofcom’s enforcement director. “But these billing issues continued for a number of years without sufficient action from O2, and thousands of customers were overcharged as a result.”

“This a serious breach of our rules and this fine is a reminder that we will step in if we see companies failing to protect their customers,” said Rasmussen. “O2 has refunded the customers who were affected, and we are satisfied the company has taken action to prevent this happening again.”

O2 response

The operator said it was disapointed with Ofcom’s decision over a “technical error”.

“As the operator proactively driving over £168m value back to our customers in the last year alone, we are disappointed by this technical error and sincerely apologise to customers impacted,” said O2 spokesperson.

“As the operator proactively driving over £168m value back to our customers in the last year alone, we are disappointed by this technical error and sincerely apologise to customers impacted,” said the O2 spokesperson.

“As Ofcom have stated today, the vast majority of funds reported were not overpaid,” said the spokesperson. “Only 6% – £2.4m – relates to money that was overpaid by customers,” said the spokesperson. “We identified the issue ourselves and notified our industry billing auditor. We have also taken proactive steps to refund all impacted customers for the extra charges they paid, plus an additional 4%.”

“As Ofcom have stated today, the vast majority of funds reported were not overpaid. Only 6% – £2.4m – relates to money that was overpaid by customers.

“We identified the issue ourselves and notified our industry billing auditor,” said the spokesperson. “We have also taken proactive steps to refund all impacted customers for the extra charges they paid, plus an additional 4%.”

Other fines

O2 is not the only mobile operator to be charged with overcharging its customers.

In 2019 mobile operator Giffgaff (owned by O2 parent Telefonica) was fined £1.4 million for overcharging millions of customers, in an error that Ofcom said was “unacceptable”.

It overcharged customers to a total of nearly £2.9m.

In 2017, EE was fined £2.7 million fine by regulator Ofcom for “fundamental billing mistakes” that saw 40,000 subscribers overcharged to the tune of £250,000 for calling the operator’s customer service number.

Vodafone was fined £4.6 million in 2016 because of “serious and sustained” breaches of consumer rules that saw customers paying for services they never received.