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BT Accused of Overcharging UK Landline Only Customers £500m+ UPDATE

Sunday, January 17th, 2021 (11:49 am) - Score 9,264
telephone uk red ringing broadband

BT has said they “strongly disagree” with a new court case being brought by Justin Le Patourel, a telecoms consultant who worked at Ofcom for 13 years. Justin claims that the broadband ISP overcharged c.2.3 million landline-only customers. If successful, the case could force the provider to pay out over £500m in compensation.

The case stems from Ofcom’s 2016/17 review of the associated market (here and here), which found that landline-only customers had been “getting poor value for money compared to those who buy bundles of landline, broadband and/or pay-TV services.”

In particular, the regulator noted that customer bills for line rental had risen significantly since 2009, while at the same time BT’s costs for providing it had fallen over the same period. One catch here is that this largely reflected monthly line rental, but not so much the fall in calling volumes that has hit related revenues (another key weighting factor for operators when setting retail prices).

Meanwhile, consumers who bundled broadband, phone and / or other services tended to benefit from big discounts. The identified landline-only issue is thus often “felt most acutely” by elderly and vulnerable people, who tend to shun bundles and stick with the same provider / standalone line rental product for years.

line_rental_costs_2015

At the time BT, which came under pressure from Ofcom over the issue, voluntarily responded by significantly reducing the line rental charge for c.900,000 vulnerable landline-only customers (reduction of £7 per month), while at the same time capping any subsequent overall increases to line rental and call charges to inflation (here). The offer was recently extended (here), thus such customers will continue to pay just £11.99 per month.

The New Court Case

According to The Times (paywall), Le Patourel’s claim – supported by Harbour Litigation (funding) and CALL (Collective Action on Land Lines) – at the Competition Appeal Tribunal (CAT) in London is based on the same Ofcom report and his allegation that BT were overcharging around 2.3 million landline-only customers between 2015 and 2018 (he can’t take this all the way back to 2009 due to a limitation in the collective litigation rules).

A BT Spokesperson said:

“We strongly disagree with the claim being brought against us.

We take our responsibilities to older and more vulnerable customers very seriously and will defend ourselves against any claim that suggests otherwise.

For many years we’ve offered discounted landline and broadband packages in what is a competitive market, and take pride in our work with elderly and vulnerable groups, as well as our work on the Customer Fairness agenda.

We continue to offer a variety of packages to support our customers through the pandemic.”

Justin Le Patourel, the Claimant Representative and founder of CALL, said:

“Ofcom made it very clear that BT had spent years overcharging landline customers but did not order it to repay the money it made from this. We think millions of BT’s most loyal landline customers could be entitled to compensation of up to £500 each, and the filing of this claim starts that process”.

If the case were to succeed then it could force BT to compensate affected customers to the tune of between £200 to £500 each (around £500m to £600m total). At the time of writing, we haven’t seen the details of this case and thus it’s hard to judge the merits. However, in absence of that, we imagine it may be quite difficult to argue that a commercial operator, which can set retail pricing however it so chooses, has “overcharged.”

At the same time, it’s currently unclear what kind of complex knock-on impacts a successful claim may have for the rest of the market, particularly since many other providers were happily charging (or overcharging) similar prices to BT for line rental during that same period. A commercial business is normally free to price its products however it sees fit, albeit usually constrained by the realities of competition.

UPDATE 18th Jan 2021

We’ve since had press releases from both sides, with additional commentary from BT and Justin added above. The press release from CALL clarified that Mr Le Patourel is also seeking compensation for customers who took both a broadband service and a BT landline, but not together as a package (or ‘bundle’). “These people were excluded from BT’s 2017 price cut, and so continue to be overcharged to this day,” states the release.

Natasha Pearman of Mishcon de Reya, who is representing Le Patourel and CALL, said:

“This is a specialist claim that will be heard before the Competition Appeal Tribunal. It is a classic example of a loyalty penalty, which were the subject of a super complaint by Citizens Advice, due to their harmful effects on consumers. It will take time to gather evidence and bring it to trial, but we are very confident that eventually millions of BT’s most loyal customers – many of whom are older and potentially vulnerable – will receive a significant rebate”.

Justin Le Patourel and CALL are now seeking authorisation by the Tribunal to act for all the BT customers who were overcharged. If they are successful, then relevant UK based customers will automatically be represented and will not need to do anything further to join the action.

Anyone who had an unbundled landline from 2015 and wants to find out more information can visit the CALL website at www.callclaim.co.uk. Equally, if anyone does not want to be included in the claim, they can opt out on the same site (no fees are payable either way as Harbour have agreed to fund the CALL claim in full). You can also call 0333 212 1617 or visit their Facebook (@callclaims) and Twitter (@call_claims) pages.

Leave a Comment
49 Responses
  1. Chris Sayers says:

    This is a hard one to call, weather its overcharging or fair market price then its difficult, ultimately BT/OR are more or less at liberty to charge what they like, let’s face it Ofcom could have tackled this themselves if there was a case to answer.

    1. Buggerlugz says:

      OFCOM is a toothless quango that panders to an industry that its MP’s have far too much investment in for them to damage in any viable way. Can’t have the regulator impacting the share-price, can we?

    2. Alex says:

      This has nothing to do with Openreach – it’s about what BT charged its retail customers.

    3. 125us says:

      @Lugz. Ofcom isn’t a quango. It’s literally a government body.

    4. GNewton says:

      @Alex: The network assets are still owned by BT plc, and Openreach Limited still is wholly owned by BT plc’s parent holding company, BT Group plc.

    5. Alex says:

      @GNewton that’s true, but totally irrelevant. In all this time, the wholesale cost of line rental – which Openreach sells – was reducing (thanks to Ofcom regulation). Any suggestion that OR could ‘charge what it likes’ is totally false – in fact wholesale prices were coming down whilst retail prices went up. This claim is about the retail pricing. Which is also why the case is being brought BT, not OR.

    6. ORbit says:

      @125us no Ofcom is not a government body (literally), it is independent (hence being .org not .gov). It is a regulatory body paid for by the companies it regulates (plus government grants), although it does have to report to Parliament.
      A Quango is ‘an organisation to which a government has devolved power, but which is still partly controlled and/or financed by government bodies’. Which is sadly (and literally), a fair and accurate description of Ofcom.

  2. Meadmodj says:

    The fact is the old PSTN is a massive overhead and the consumer call volumes on landlines are no longer there.
    Phone only lines are decreasing at a significant rate was 500k per year.
    BT has already started to migrate customers with broadband to BT Digital Voice and this will accelerate over the next two years, Many customers are not bothering with Landline on change from DSL.
    Most ISPs including BT hide telephone only services now as there is no money in it.
    The cost of provision per Direct Exchange Line connection on the PSTN is increasing exponentially as the legacy cost remains for less customers until 2025. Should BT really be forced to subsidise PSTN based services with VoIP based services or their broadband customers (all types)?

    This was reviewed by the regulator in 2017 and BT introduced voluntary discounts including the Home Phone Saver Plan
    Ofcom currently have another consultation out as this agreement is ending in March.

    If BT are forced to reimburse then it will simply paid for by existing customers (a lot less phone only users now and likely to be more vulnerable) and possibly reduce money available to protect these specific users as we move forward. It would be more productive for instance to ensure these customers are moved a low data FTTP service on which they can then purchase a competitive phone product from any VoIP provider.

    1. Chris Sayers says:

      @Meadmodj To me this has the smell of speculative invoiceing, after reading your response I am with BT, I am not sure this case has merit, I hope its thrown out.

    2. Meadmodj says:

      These are BT’s proposals proposed which Ofcom are intending to accept subject to the consultation:
      • Continue with an inflation-linked control (CPI+0%) on the basket of line rental and call charges for voice-only products. We believe a continuation of prices which remain flat in real terms is a proportionate, clear and timely way to continue to protect consumers. BT has also committed to an annual CPI+0% limit on prices for its Home Phone Saver product and a safeguard cap of CPI+2.5% for its line rental product
      • Commitment duration of five years. This will provide certainty for customers for the next five years and allow us to reassess the right protections once the Public Switched Telephone Network (PSTN) switch-off has taken place, which is scheduled to be completed by December 2025
      • Commitments apply to all voice-only products and services taken by customers, regardless of the technology used to deliver the service. This will ensure that customers are protected, irrespective of the technology used to deliver the service. We think this is particularly important as customers are migrated to different technologies – such as as ‘voice over internet protocol’ (VoIP) – as a result of PSTN switch-off

      Paying out a few hundred million has to have an impact on this commitment.

      It could be argued that Ofcom (established 2003) did not do more as over years alternative LLU suppliers and other suppliers such as Virgin were creaming off profitable revenue in the areas they covered yet BT was still burdened with the universal telephony obligation.

      It’s the old chestnut of head to head market competition against the need for social inclusion and cross subsidy of services.

      As for us who may advising those that are vulnerable they need to know that Home Phone Saver Plan exists and that there are alternatives such as GSM desktop phones, ATA to Cell converters etc. Personally I’d be happy for a vulnerable person next door to piggy back on my broadband regardless of the T&Cs.

    3. Buggerlugz says:

      Too right Meadmodj, Virgin should have been forced to unbundle their cable years ago to provide a level playing field with BT. Instead we now have a 2 man monopoly which can just charge whatever they like.

    4. 125us says:

      @lugz. I don’t think you understand how it works. OR’s line rental rates are set by Ofcom. Retail prices are set by the telcos who use OR’s network. The two are different things.

      You’re also forgetting the three mobile phone companies not owned by BT.

      It takes quite the twisting of logic to present the situation as a mo Oporto where the players can charge what they like. It’s simply not true. Wholesale prices are regulated, retail prices are determined by the market.

  3. Jose says:

    Back then in 2012 I moved into a new home, when I try ed to get Internet with
    A provider,I had to find out what tete phone number was my house.
    So I rang BT to ask them for my house phone number,they told me that I had to be with them to get my house phone number for a year, at £26 a month.
    Thats over £300 a year. I didn’t have much choice I didn’t even ever use the land line. They ripped me off even I never had no Internet with them but with some of companie .so for a year I had to pay them over £300 for nothing.
    Just to get my house number. I’m sure a lot of people got rip off by them.
    I never forgive them for it.

    1. 125us says:

      There is no ‘house number’. You order a phone line and your telco allocated a number from its pool of available ones. Usually if some moves home and doesn’t take the number with them it goes into a holding list and won’t be reallocated for some months due to the amount of wrong number calls likely to be generated.

      It sounds like you ordered a very specific unusual service and you were charged the going rate for it.

    2. The Facts says:

      Did you try dialling a number from the line to see what number was displayed?

    3. Leex says:

      Sounds like a not very competent person

      You get a landline number when you sign up for broadband and landline (sounds like he was trying to move his broadband from old house to new house and thought he had to pay bt for a landline)

      A house does not have a land line number tied to it

    4. What says:

      @Jose

      I think this issue was actually caused by you not understanding.

  4. Charles_jansan says:

    I am with BT and I have had so many arguments with them over the last 12 months were they have tried to rip me off they are the same with there mobiles it’s about time ofcom and the government brought them under control.

    1. Alex says:

      Brought them under control? They’re already extremely limited in what they can do or branch into and they’re tied to agreements that are seeing them go down hill.

  5. John says:

    I moved into a new build property 3 years ago and the only services offered to me was FTTP from BT, as I couldn’t go with any other provider I had no choice but to pay BT prices!!! And after 3 years I still can’t change provider as there is still no other FTTP providers available.

    1. James™ says:

      There are plenty of providers now!
      This is a list of providers, click on “Get FTTP for your home in Great Britain” and there is a list that shows you what companies you can check out!
      https://www.openreach.com/fibre-broadband/fttp-providers

    2. What says:

      @John

      If what you say is true please provide a post code to prove it

    3. John - not the guy above says:

      There’s not a single development, street, postcode or individual property in the country that only has access to BT FTTP.

      There never has been either.

      If you can provide an address where BT is the only provider available I’ll happily make a donation to a charity of your choice.

    4. Aqx says:

      I second what second John has said. I’ll also contribute to a charity if an address can be provided which only provides BT FTTP and no other supplier.

    5. NE555 says:

      > There’s not a single development, street, postcode or individual property in the country that only has access to BT FTTP.

      No, but there are properties which only have access to Openreach FTTP – and since Openreach is wholly owned by BT, that’s probably where the confusion arose.

      Openreach-based FTTP services can now be bought through BT, Sky, Talktalk, Zen, EE, and others. However, if you only want 40Mbps and don’t mind a 24 month contract, then BT is likely to be cheapest: Fibre Essentials is delivered over FTTP for properties without copper.

  6. Oggy says:

    Why do people in the comments section here tell so many lies?

    Such obvious lies from ‘Jose’ and ‘John’ on this thread.

    1. AT says:

      I don’t think they are lies as such but a total misunderstanding of the situation, or blaming a company for their own lack of investigation/thought process.

    2. What says:

      @Oggy

      You’re right.

      People do post absolutely rot here because they think they are clever but they make themselves look stupid.

    3. Oggy says:

      Sorry AT but I would definitely say it is people lying.

      In this thread we’ve had ‘Jose’ claiming they moved house and went to another supplier in 2012 who weren’t able to place an order so he had to place an order and was tied to BT. That simply doesn’t make any sense.

      We then have ‘John’ claiming he has FTTP from BT and is stuck with them despite us knowing other providers can offer FTTP over BT infrastructure.

      We then had someone claiming the other day that someone from OFCOM told them to bin Vodafone and go to BT as Openreach would treat BT better then any other provider!

      It’s sad and pathetic that people do it and also worrying that they are so demented they think they won’t get called out for it.

    4. Mark Jackson says:

      @Oggy,

      You’re making the wrongful assumption that everybody is as familiar with the market as you claim to be, which is most definitely not the case. AT’s thoughts on this are a fairer reflection of reality and I speak after 21 years at the helm of ISPreview, where a lot of my time is spent helping people to resolve problems.

      I’m certain there will be areas, in other markets or topics, where some of the things you might say yourself could look equally silly due to a lack of knowledge on the subject. If somebody is lacking in knowledge then don’t chastise them.. help them.

    5. Oggy says:

      Hey Mark, when I know nothing I keep my mouth shut! I tend to find that’s the best thing to do.

    6. What says:

      @Mark Jackson

      There is one thing people coming here for advice and you do a great job, but to come here and make claims that are not true is another matter.

      For example would it OK to claim your web site is crap just because someone doesn’t understand the technology? No it wouldn’t

    7. GNewton says:

      People are being deceived by the telecoms industry all the time with half-truths or plainly wrong information.

      E.g. many believe they got fibre broadband when then haven’t, because of the incompetent ASA not doing its job.

      Or there is a danger of looking at the issue of the landline only from a certain angle when in fact there is wholesale line rental versus landline rental charges for end customer. Remember the BT Group owns several companies and divisions, including for Wholesale and Consumer.

      The confusion amongst many even includes the term “landline” itself, with many believing if they don’t use telephony services via it they get ditch the landline which of course is wrong when they still use it as a broadband line.

  7. Fastman says:

    john comment I moved into a new build property 3 years ago and the only services offered to me was FTTP from BT, as I couldn’t go with any other provider I had no choice but to pay BT prices!!! And after 3 years I still can’t change provider as there is still no other FTTP providers available.

    think the issue in this one is that there is no copper on this site (new site) so all that was on offer was an FVA product – not sure who are selling FVA , – this is what is termed a Greenfield FTTP site not a brownfield FTTP site ,

    John you could have been on a openreach lock out site where you had not choice from anyone epect who your developer did a deal with

    this forum never ceased to amuse me (perhaps thats not the most appropriate wording

    1. The Facts says:

      ‘John you could have been on a openreach lock out site where you had not choice from anyone epect who your developer did a deal with’

      Openreach do not supply the service to the customer, there are and were a number of ISPs providing FTTP over Openreach fibre.

    2. GNewton says:

      @TheFacts:

      Stop spreading half-truths here. Openreach manages the FTTP network, and the ISPs using this network infrastructure do the customer services, and the latter are the ones who customers should contact, not Openreach.

      Anyway, this whole lot is a mess:

      Customer > ISP > Openreach > ISP > Customer

      is the usual line of communication, which is a bad situation for the customer who just wants a working service. Openreach should have become an independent company. Unfortunately it is wholly owned by BT, Openreach doesn’t even own the network infrastructures.

    3. Oggy says:

      Newts, you’ve been pulled up before for some of your comments as you well know. Go on, mention TrustPilot.

      There is not a single person in the UK who is restricted to only BT Retail as their landline supplier.

      There is not a single person who can only have BT Retail as their ISP. Even going back to the days of Exchange Activate in remote exchanges there were other options.

    4. The Facts says:

      @GN – complicated by a fault can be customer kit / ISP router / OR/VM/B4RN etc. infrastructure / ISP infrastructure / ‘internet’ with varied ownership / destination infrastructure / destination kit.

    5. John says:

      If BT FTTP is available then so are dozens of other ISP’s who use BT Wholesale as a supplier.
      Zen, A&A, Cerberus, IDNet, Uno, etc etc, are all available anywhere that BT FTTP is.

      That includes Greenfield FTTP only sites. The choice of FTTP supplier is the same on both Greenfield/brownfield sites.
      FVA is no longer a product that can be purchased. I’m not sure what relevance FVA has.

      Even when FVA was for sale there was other ISP’s who could provide a voice service on Greenfield FTTP only sites.

      There was a choice of ISP’s on the early FTTP trials in Bradwell Abbey way back in 2010 and also on the Highams Park FVA trials in 2012.

      Since 2010 I don’t think there has been a single address in the UK where BT is the only ISP.
      Greenfield sites, brownfield sites, pinkwithbluespotsfield sites, it matters not.

      I’ve met OpenReach engineers who have thought BT was the only FTTP provider in the past.
      I’ve been in the showroom in a new development being told by sales staff BT were the only ISP available as they had “exclusivity”. She was saying this with a firebrick on the desk behind her, connected to the ONT and running FTTP via A&A.

      So I’m not surprised at some of the confusion that used to come around this issue.

      As I said at the beginning of this post…

      “If BT FTTP is available then so are dozens of other ISP’s who use BT Wholesale as a supplier.”

      I’ll happily make a small donation to a charity of your choosing if you can provide any address where BT is the only FTTP ISP available.

      (Much of this post is a copy / paste from this point being made before, more than once)

    6. GNewton says:

      @Oggy: “There is not a single person who can only have BT Retail as their ISP.”

      Agree, I never said otherwise. And of course you are entitled to your dislike of Truspilot. But what has the latter got to do with this forum thread’s subject?

    7. Oggy says:

      @Newts

      I don’t dislike TrustPilot, just the way you have referred to it about 50000000000 times on this site.

  8. LowLight says:

    Surely Max is involved here in these amusing comments. With regards to being forced to go with BT for FTTP ( how things have changed, people now moaning about FTTP) i am aware of some new build sites back in the day having BT as the only CP to offer services as FTTP was in its infancy, no other CP was selling it, so you had no choice. That didn’t last too long though, Zen and a few others jumped on board, with TT and Sky coming along a lot later?

    1. John says:

      ” i am aware of some new build sites back in the day having BT as the only CP to offer services as FTTP was in its infancy, no other CP was selling it, so you had no choice. “.

      That’s always been the assumption, but it’s not necessarily the reality.

      You need to go back to 2010 (at least) where there was no other ISP’s selling OpenReach FTTP over BT Wholesale tails anywhere it was available. In other words nationwide.

      I’m not convinced it is the case though that BT have EVER been the only choice for FTTP, even back in 2010.

      There’s lots of smaller niche ISP’s who were willing and able to place manual orders for FTTP before their ordering systems were even in place.

      Even the Ebbsfleet trials in 2008 were open to other ISP’s.

  9. Guy Cashmore says:

    As I have said before, the telecoms industry is likely to be the new PPI scandal, selling copper as fibre being the classic example.

    1. Fastman says:

      so where does that leave virgin media who have been selling fibre for donkeys years — this is so a non story — ASA cleared it so never going to happen,

      this is from Ofcom website — Cable networks use fibre optic and coaxial cables to deliver superfast broadband services – as well as TV and phone services – direct to homes. Fibre broadband is delivered via clusters of fibre optic cables (each one thinner than a human hair) and speeds are faster than ADSL.

    2. 125us says:

      That seems fantastically unlikely. Broadband is a rented product, not one sold outright, and it’s sold primarily on the speed, not the technology.

      ISPs have cover for using the term fibre from the ASA who rejected the original complaint against Virgin for using the term for an HFC service, that ruling giving the green light for any product which uses fibre in the access network to be called fibre broadband.

      For there to be a compensation scheme similar to PPI you would have to prove ISP customers were permanently deprived of something fraudulently. Unless your position is that VDSL and Docsis customers didn’t receive a service in the periods they rented it, there’s no case.

      Saying something and then saying it again doesn’t make it true or likely.

    3. GNewton says:

      “Saying something and then saying it again doesn’t make it true or likely.”

      This is very true, yet it is exactly what the ASA did, triggering a massive deception in this country allowing telecoms to misuse the term “fibre broadband”. It promoted a belief, concept, or idea that is not true. This kind of deception wouldn’t be possible in other countries like France etc.

  10. Oris says:

    This is interesting…
    I’ve checked my BT bill and noticed, I’ve been charged for a service I have not ordered for several years now 7 on record, that’s an extra £1.50-£2.20 current. The service is (Unlimited weekend calls or Line Rental plus), So I have BT line rental service and I use Sky calls/broadband for everything else and have done so for over 10years. I have never used any of the BT services weekend calls or the Plus services.

    I did not order the above services and I have never used them, BT have no order date, they have no use of any of the services recorded or any calls made for the past 7 years, so why exactly are they charging me for a service which clearly has not been used in over 7 years.

    If not for this article, or indeed CoviD, I’d be still paying the bill as usual for services I didn’t order let alone use…

    I’ve called BT to discuss these discrepancies, they have no record of an order placed ever, no record of any calls made or use of any of the other service benefits, cutting a long story short, BT offered me £50 to compensate me for the over charge, est. £2.21pm x 12mths = £26.52yr x 7years = £185.64 estimated overpayment, can be less over the past 7 years. in return BT offered me £50 to shut up and put up,

    Guys carry on the good work, this case needs all our support, these service providers are very sneaky and manipulative, its robin hood, broad daylight robbery, except it’s the rich stealing from the poor as usual, lets put a stop to this…

  11. Jason Bawanak says:

    British Telecom are overcharging thieves full stop. They should be broken up and rigidly controlled to stop overcharging.

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