VODAFONE FINED BY OFCOM

On 26 October 2016 Ofcom announced that Vodafone will be fined £4,625,000 for serious and sustained breaches of consumer protection rules.

The fine follows two investigations by Ofcom into Vodafone’s practices.

The first investigation found that 10,452 Pay As You Go customers failed to have their accounts credited by Vodafone when they topped up their Pay As You Go accounts.  Customers lost £150,000 over a 17 month period.

Ofcom also found that Vodafone failed to act quickly enough to identify or address this issue, which was the result of Vodafone transferring to a new billing system.  Vodafone only took effective steps once Ofcom intervened.

Vodafone breached Ofcom’s billing rules because the top ups that consumers had purchased were not reflected in their credit balances.

The second Ofcom investigation revealed that Vodafone failed to comply with Ofcom’s rules on handling customer complaints.  Vodafone’s customer service agents were not provided with clear guidance on what constituted a complaint, and Vodafone’s processes were insufficient to ensure that all complaints were appropriately escalated or dealt with in a fair manner.

Vodafone have been fined £3,700,000 for the Pay As You Go issue where they took customers’ money without providing a service in return, and £925,000 for the issues in relation to its complaints handling processes.

The money, which needs to be paid to Ofcom within 20 working days, will be passed on to HM Treasury.

Lindsey Fussell, Ofcom’s Consumer Group Director, said “Vodafone’s failings were serious and unacceptable, and these fines send a clear warning to all telecoms companies”.

It has now become apparent that regulators are now regularly becoming successful in recouping extremely large fines in relation to breaches by companies.  It is therefore vital that companies ensure that they are fully up to speed and on top of their regulatory requirements.

For further information on the regulations that your business may be subject to, please contact Nils O’Donoghue at Chadwick Lawrence Solicitors on nilso@chadlaw.co.uk