UPDATE Ofcom UK Fine EE £2.7m for Overcharging 40,000 Mobile Customers

The telecoms regulator has today hit Mobile Network Operator EE (BT) with a fine of £2.7 million after they were found to have overcharged around 40,000 subscribers for calls to the company’s own “150” customer services number. It’s not the first time EE has had to pay off an Ofcom fine.

Readers may recall that an investigation was first launched in January 2016 (here) and in November 2016 Ofcom claimed to have found “reasonable grounds for believing” that some of EE’s Mobile customers may have received inaccurate bills (here). Today we learn precisely what Ofcom uncovered and it follows another £1 million fine for shoddy customer complaints handling that was raised in 2015 (here).

In the end Ofcom found that EE “broke a fundamental billing rule” on two separate occasions, with the regulator chastising the operator for its “carelessness or negligence” (take your pick, says Ofcom).

What were the two incorrect billing incidents?

1. First, EE customers who called the company’s ‘150’ customer services number while roaming within the EU were incorrectly charged as if they had called the United States. This mistake saw customers charged £1.20 per minute, instead of 19p per minute. As a result, at least 32,145 customers were overcharged around £245,700 in total.

Ofcom’s investigation found that EE’s carelessness or negligence contributed to these billing errors. In addition, while it did not set out to make money from its billing mistake, EE had decided not to reimburse the majority of affected customers until Ofcom intervened. EE wrongly decided it couldn’t identify the people it overcharged and was proposing to give their money to charity, which would have left them out of pocket.

2. Second, despite making it free to call or text the ‘150’ number from within the EU from 18th November 2015, EE continued to bill 7,674 customers up until 11th January 2016. In total, these customers were overcharged £2,203.33, although EE did take prompt action on this occasion and issued full refunds to those affected.

Apparently this occurred because Tüv Süv BABT, the company that approves EE’s metering and billing system, informed Ofcom in September 2015 of an “Extraordinary Performance Failure” in relation to that system. This failure was caused by EE in 2008 instructing its third-party data clearing house to remove the 44 UK international dialling code from the records of customer calls made to certain short code numbers, including EE’s own customer service number ‘150’.

The above change meant that, between 1st July 2014 and 20th July 2015, EE’s billing system interpreted the leading ‘1’ digit as the international dialling code for the United States. But to make matters worse EE also failed to check and test that the change had been implemented correctly and they didn’t preserve detailed billing records or warn customers.

Lindsey Fussell, Ofcom’s Consumer Group Director, said:

“EE didn’t take enough care to ensure that its customers were billed accurately. This ended up costing customers thousands of pounds, which is completely unacceptable. We monitor how phone companies bill their customers, and will not tolerate careless mistakes. Any company that breaks Ofcom’s rules should expect similar consequences.”

The penalty is said to incorporate a 10% reduction after EE was able to reach a formal settlement with the regulator and take “full responsibility” for the cock-up. The majority of customers have already been refunded, although EE weren’t able to identify “at least 6,905” of those affected (these were left roughly £60,000 out of pocket in total).

Ofcom has been handing out quite a few fines for service failings of late and today’s ruling will no doubt give other operators’ some encouragement to ensure that they treat customers fairly, although £2.7m is but a drop in the ocean to a business of EE’s size.

A Spokesperson for EE said:

“We accept these findings and apologise unreservedly to those customers affected by these technical billing issues between 2014 & 2015. We have put measures in place to prevent this from happening again, and have contacted the majority of customers to apologise and provide a full refund. For those customers that we could not identify, we donated the remaining excess fees to charitable causes in line with Ofcom’s guidelines.

Providing the best network experience and best customer service for EE customers in store, online and over the phone through our UK and Ireland-based centres are our top priorities. Following Ofcom’s findings, we have made a number of additional improvements to our systems and policies to allow us to better support our customers in the rare occasion that billing issues do occur.”

The fine itself must be paid to Ofcom within 20 working days and after that it will be passed on to HM Treasury (Government). EE has also made a donation of just under £62,000 to charity in lieu of the payments owed to some of the remaining customers. On top of that Ofcom is requiring EE to make further attempts to trace and refund every customer who was overcharged.

UPDATE 7:24pm

Added a comment from EE above.