{"id":25570,"date":"2021-01-17T11:49:44","date_gmt":"2021-01-17T11:49:44","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=25570"},"modified":"2021-06-24T08:31:43","modified_gmt":"2021-06-24T07:31:43","slug":"bt-accused-of-overcharging-uk-landline-only-customers-500m","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2021\/01\/bt-accused-of-overcharging-uk-landline-only-customers-500m.html","title":{"rendered":"BT Accused of Overcharging UK Landline Only Customers \u00a3500m+ UPDATE"},"content":{"rendered":"

BT<\/a> has said they “strongly disagree<\/em>” with a new court case being brought by Justin Le Patourel, a telecoms consultant who worked at Ofcom<\/a> 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 \u00a3500m in compensation.<\/p>\n

The case stems from Ofcom<\/a>’s 2016\/17 review of the associated market (here<\/a> and here<\/a>), 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<\/em>.”<\/p>\n

In particular, the regulator noted that customer bills for line rental had risen significantly since 2009, while at the same time BT<\/a>’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).<\/p>\n

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<\/em>” by elderly and vulnerable people, who tend to shun bundles and stick with the same provider \/ standalone line rental product for years.<\/p>\n

\"line_rental_costs_2015\"<\/div>\n

At the time BT<\/a>, which came under pressure from Ofcom<\/a> over the issue, voluntarily responded by significantly reducing the line rental charge for c.900,000 vulnerable landline-only customers (reduction of \u00a37 per month), while at the same time capping any subsequent overall increases to line rental and call charges to inflation (here<\/a>). The offer was recently extended (here<\/a>), thus such customers will continue to pay just \u00a311.99 per month.<\/p>\n

The New Court Case<\/strong><\/span><\/h3>\n

According to The Times<\/a> (paywall), Le Patourel’s claim – supported by Harbour Litigation<\/strong> (funding) and CALL (Collective Action on Land Lines) – at the Competition Appeal Tribunal<\/strong><\/a> (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<\/span>).<\/p>\n

A BT Spokesperson said:<\/strong><\/p>\n

“We strongly disagree with the claim being brought against us.<\/p>\n

We take our responsibilities to older and more vulnerable customers very seriously and will defend ourselves against any claim that suggests otherwise.<\/p>\n

For many years we\u2019ve 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.<\/p>\n

We continue to offer a variety of packages to support our customers through the pandemic.”<\/p><\/blockquote>\n

Justin Le Patourel, the Claimant Representative and founder of CALL, said:<\/strong><\/p>\n

“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 \u00a3500 each, and the filing of this claim starts that process”.<\/p><\/blockquote>\n

If the case were to succeed then it could force BT to compensate affected customers to the tune of between \u00a3200 to \u00a3500 each (around \u00a3500m to \u00a3600m 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<\/em>.”<\/p>\n

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.<\/p>\n

UPDATE 18th Jan 2021<\/strong><\/p>\n

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<\/em>,” states the release.<\/p>\n

Natasha Pearman of Mishcon de Reya, who is representing Le Patourel and CALL, said:<\/strong><\/p>\n

“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 \u2013 many of whom are older and potentially vulnerable \u2013 will receive a significant rebate”.<\/p><\/blockquote>\n

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.<\/p>\n

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<\/a>. 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.<\/p>\n","protected":false},"excerpt":{"rendered":"

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. 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