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Telecoms regulator Ofcom has slapped BT-owned mobile network operator (MNO) EE with a £2.7m fine after a year-long investigation concluded that the company had broken fundamental billing rules on two separate occasions, overcharging tens of thousands of customers.
In the first instance, EE subscribers who called its “150” customer services number while roaming in the European Union (EU) were charged as if they had called the US, meaning they were charged £1.20 per minute instead of the usual 19p. This glitch affected 32,145 customers and cost £245,700.
Ofcom’s consumer group director, Lindsey Fussell, 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 regulator’s investigation concluded that the error arose because EE had instructed its third-party data clearing house to remove the “+44” international dialing code for the UK from the records of customer calls made to contain short code numbers, such as “150”.
Although this was done back in 2008, between July 2014 and July 2015, conditions arose that led to EE’s billing system interpreting the leading “1” digit in “150” as “+1”, which is the international dialing code for the US, and billing users accordingly.
Ofcom found that EE had failed to check its instructions were properly implemented; failed to test tariff changes that produced the overcharging; did not preserve detailed billing records or warn customers; or promptly notify Tüv Süv BABT, its metering and billing system approval supplier.
By warning Tüv Süv BABT, it would have helped EE to identify and reimburse affected customers, and was the firm that first flagged the breaches to Ofcom.
The operator further compounded the error, said Ofcom, by deciding not to reimburse affected customers until the regulator intervened, and then wrongly decided it couldn’t identify the people it overcharged and was proposing to donate the money to charity instead.
Additionally, Ofcom discovered that despite making calls and texts to “150” free from 18 November 2015, nearly 8,000 customers continued to be billed until 11 January 2016, although it noted that EE did take prompt action to refund those customers.
Read more about mobile roaming charges
The penalty includes a 10% reduction to reflect EE’s agreement to enter a formal settlement and take full responsibility for the breaches. The operator will also make a donation of just under £62,000 to charity in lieu of refunds that should have been made to 6,905 untraceable users, although Ofcom has also asked EE to make further attempts to trace and refund them first.
In a statement, an EE spokesperson said: “We accept these findings and apologise unreservedly to those customers affected by these technical billing issues between 2014 and 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, which must be paid in 20 days, will be passed to HM Treasury. Although substantial in its own right, this amount is, however, dwarfed by October 2016’s fine of more than £4m levied on Vodafone, after a botched IT migration caused problems for many of the operator’s pay-as-you-go customers.
More than 10,000 Vodafone customers lost a total of £150,000 over a period of 17 months after the operator failed to credit their account after they had topped it up with funds.
Cable.co.uk telecoms analyst Dan Howdle said the scale of EE’s fine was down in most part not to errors in billing systems, which are relatively common, but to its “poor handling and devil-may-care attitude to reimbursement”.
“Providers across the entire sector should see this as a stark warning: Fix your mistakes or there will be consequences. This morning, other major providers will be taking a long, hard look at both their billing rules and the methods used to address errors made,” he added.