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Ofcom Fines BT £2.8m Over UK Customer Contract Info Failings UPDATE

Wednesday, May 22nd, 2024 (7:25 am) - Score 2,640
Contract under magnifying glass

The UK telecoms, internet and media regulator, Ofcom, has today hit broadband ISP BT (including subsidiaries EE and Plusnet) with a fine of £2.8 million, which occurred after their investigation found the operator had “failed to provide” 1.1 million customers with clear and simple contract information before signing up to a new deal.

The investigation, which began in January 2023 (here), actually represented somewhat of a merger and continuation of the investigation that Ofcom originally launched into EE during October 2022 (here), which focused upon the exact same issue. During the course of that probe, Ofcom received new information, which gave them “reason to suspect that Plusnet – another BT subsidiary – may also have failed to comply” with their rules.

The situation concerns the new consumer protection measures that Ofcom introduced on 17th June 2022 (here). The relevant change (General Conditions C1.3 to C1.7 and C5.16) is the one that requires broadband and mobile operators to provide customers with a short, one-page summary of the main contract terms before entering a contract, including clear examples of how any price increases might impact the price they pay.

The change was designed to help people avoid being caught out by surprise price rises, which was particularly important because it occurred at a time when household budgets were under heavy strain (this remains the case today). The summary was also designed to include key information about the broadband speed of the service, price, and length of the contract. In addition, it further required firms to set out the terms and conditions if a customer decided to end their contract early.

The Outcome

In short, Ofcom has concluded that BT’s siblings had failed to provide these documents to some customers. The regulator found that, since 17th June 2022, EE and Plusnet had made more than 1.3 million sales without providing customers with the required contract summary and information documents.

Just to be clear. The evidence shows there were at least 1.1 million customers affected by this, which is less than the 1.3m mentioned above because some customers purchased more than one service affected by the failure. This is all despite BT telling Ofcom, in February 2022, “that it was confident the deadline would be met.”

Ofcom’s Summary

Evidence we have gathered shows that BT was aware from as early as January 2022 that some of its sales channels would not meet the deadline. In some cases, BT deliberately chose not to comply with the rules on time. Other providers dedicated the resource required to meet the implementation deadline for these new rules, and BT is likely to have saved costs by not doing so.

Following engagement with Ofcom, BT contacted 1.1 million customers – the majority of those affected – between 26 June and 30 September 2023, explaining that it had not provided them with the information to which they were entitled. Those customers have been given the opportunity to request the information and/or cancel their contract without charge.

However, before these communications were sent, some customers left BT before the end of their contract and may have been charged an early exit fee. Our rules are clear that if the required contract summary and contract information is not given, the contract is not binding on customers. As a result, an early exit fee should not have been payable by these customers.

Also, some sales channels are still non-compliant and BT is still not providing the required information at the right time to some customers.

As a result of these failings, Ofcom has today decided to fine BT £2,800,000 to reflect the “seriousness of this breach.” As well as fining BT, Ofcom are also requiring them to identify and refund any affected customers who may have been charged for leaving before the end of their contract period, within 5 months of this decision.

On top of that, BT has been given 3 months to contact the remaining affected customers who are still with the operator and have not already been contacted, to offer them their contract information and/or the right to cancel their contract without charge.

Finally, BT has been told to amend the remaining sales processes that are still non-compliant to ensure that all customers receive the right information at the right time, in most cases within three months of this decision.

Ian Strawhorne, Ofcom Enforcement Director, said:

“For people to take advantage of the competitive telecoms market here in the UK, they must be able to shop around with confidence.

When we strengthened our rules to make it easier for consumers to compare deals, we gave providers a strict timeline by which to implement them. It’s unacceptable that BT couldn’t get its act together in time, and the company must now pay a penalty for its failings.

We won’t hesitate to step in on behalf of phone and broadband customers when our rules to protect them are broken.”

At the time of writing we don’t yet have BT’s official response to this, but Ofcom does note that BT has made an “admission of liability and agreement to settle the case“, which has resulted in a 30% reduction in their fine. The operator now has four weeks to pay the fine, which will then be passed on to HM Treasury.

UPDATE 8:59am

A spokesperson for BT told ISPreview: “We’re sorry that some of our Pre-Contract information and Contract Summary documents were not available to some of our customers in a timely manner. We apologise for any inconvenience caused and have taken steps to proactively contact affected customers and arrange for them to receive the information and be refunded where applicable. We take compliance seriously at BT and we’re working closely with Ofcom to implement the remedial actions as a result of their findings.”

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Mark-Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook and .
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Comments
13 Responses
  1. Avatar photo DD says:

    If EE has been fined then Vodafone should be next for not disclosing pre-discounted prices on their broadband packages, and for not making it transparent what the pre-discounted prices are for contracts sold through third party resellers. These pre-discounted figures are important for calculating CPI and also the termination fee.

  2. Avatar photo DL says:

    Maybe a stray full stop near the end of the headline? Please feel free to remove this comment if you edit the headline and this comment no longer makes sense.

    1. Mark-Jackson Mark Jackson says:

      Info. is just signalling an abbreviation of Information, but it’s not strictly necessary, so I’ll take it out.

    2. Avatar photo Webber says:

      Mark, I thought it was better English with it in.

  3. Avatar photo anonymous says:

    What about VM? They failed on 3 contract renewals to send me end of contract information and what options were and other people reported on their customer forums over time too; perhaps this is another day’s news 🙂

    1. Avatar photo NotJeff says:

      They, along with O2, also neglected to notify me of end of contract recently and then decided to claim that they had indeed sent notification but could not clarify on how this was sent or provide any proof that it was when questioned on it.

    2. Avatar photo AQX says:

      Cry about it to Ofcom & raise a complaint via VM online so that it gets sent to Ofcom for the yearly complaint reviews.

    3. Avatar photo anonymous says:

      Ofcom is a quango of unelected people much like ofwat and ofgem. Useless entities filled by a vacuum.

  4. Avatar photo Billy Shears says:

    Not good enough. £2.8 million is loose change and simply refunding the unlawful payment to the customer is like telling a burglar to hand it back and now you can go. This sort of activity isn’t going to stop until someone in the organisation is facing jail time.

    1. Avatar photo Buggerlugz says:

      I agree. There needs new laws in the UK making company board members administering such clearly divisive practices to be criminally culpable. We all know, that’ll never happen.

    2. Avatar photo 125us says:

      What crime do you believe was committed?

  5. Avatar photo John says:

    If only water, energy, banks etc. regulators could keep those greedy lot in check using billions in fines, then they’d all behave…

  6. Avatar photo Buggerlugz says:

    And how many other telecoms do exactly the same thing? What are OFCOM going to do fine them all with a slap on the wrist? Honestly £2.8m is peanuts to these companies. Hell, the level of obfuscation in the contracts probably lined their pockets with much more cash than the fine did.

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