Own-initiative investigation into TalkTalk Group’s billing for cancelled services

18 August 2011

Complainant: Own-initiative investigation
Complaint against:
TalkTalk Telecom Limited and Tiscali UK Limited (together, for ease of reference, the TalkTalk Group)
Case opened: 23 July 2010
Investigation closed: 2 November 2010
Case closed: 18 August 2011
Issue: Whether the TalkTalk Group is complying with the requirement not to bill customers for services that have not been provided.
Relevant instrument:
General Conditions 11 ("GC11") of the General Conditions of Entitlement.

Update note – 23 September 2011

Ofcom has today published the non-confidential version of the notification issued to TalkTalk Group on 17 August 2011 of a penalty under section 96 of the Communications Act 2003. This document can be found at the relevant link under ‘related items.’

End of update note

Ofcom has concluded its investigation into TalkTalk Group’s compliance with GC11.1 by the deadline set out in the notification issued to it on 1 November 2010.

The investigation found that whilst TalkTalk Group took significant steps to remedy the consequences of its breach of GC11.1, it had not taken the steps Ofcom considered appropriate for complying with GC11.1 and had continued to breach that Condition (by issuing 2,928 bills to customers (end-users) for services it had not provided in the period between 2 December and 4 March 2011). 

Ofcom has decided to impose on TalkTalk Group a financial penalty under section 96 of the Act. The amount of that penalty is £1,524,728 in respect of TalkTalk Telecom Limited and £1,512,392 in respect of Tiscali UK Limited. The penalty is imposed on both companies for their contravention of GC11.1 between 1 January and 1 November 2010 notified to them under section 94 of the Act, in which period they billed 62,055 customers for services they had not provided (in particular, for cancelled services).

In reaching its decision, Ofcom took account of the available evidence, TalkTalk Group’s representations, the steps it had taken towards complying with GC11.1, the significant steps it had taken to remedy the consequences of its breach; and Ofcom’s penalty guidelines.

A non-confidential version of the penalty notification is currently being prepared and will be published in due course.

Update note: 28 February 2011

Ofcom has considered the representations made by TalkTalk Group in detail. Ofcom has also issued a further information request to TalkTalk Group to determine the level of compliance and remedial action it had taken by the deadline of 2 December 2010.

The information provided by TalkTalk Group disclosed that it had taken significant steps to remedy the consequences of its breach and to comply with GC11.1 by 2 December. These steps included identifying over 62,000 affected consumers and making almost £2.5 million in refunds and good will payments.

Despite the actions taken by TalkTalk Group, Ofcom is still receiving some complaints from consumers. In light of these and information from TalkTalk Group, Ofcom will continue its investigation into TalkTalk Group’s compliance with GC11.1 by 2 December (and thereafter). If the investigation reveals that TalkTalk Group has continued to breach GC11.1, Ofcom will consider further enforcement action, which may include issuing a financial penalty.

Affected consumers can contact TalkTalk Group directly on its hotline number: 0800 5428 073.

Further updates on this case will follow in due course.

End of update note

Update note: 20 December 2010

TalkTalk Group had until 2 December to make representations to Ofcom about the matters set out in the Notification we issued to it on 1 November 2010, to comply with the relevant rule (General Condition 11.1) and to remedy its breach of that rule. 

TalkTalk Group has made representations to Ofcom asking for more time to comply with the rule and remedy the breach and setting out what it has done and proposes to do in the extra time requested. 

Ofcom is currently considering these representations in detail. In particular, whether the request for extra time should be granted or whether further enforcement action, which could include a financial penalty, should be taken.

Further updates on this case will be made available in due course.

End of update note

Update note: 30 November 2010

A non-confidential version of the Notification issued to TalkTalk Group on 1 November 2010, under section 94 of the Communications Act 2003 has now been prepared. Please see related item.

End of update note

Ofcom has concluded its investigation into TalkTalk Group and determined that there are reasonable grounds for believing that since 1 January 2010, TalkTalk Group has contravened, and is contravening, GC11.1 by issuing bills to customers (end-users) for services that have not been provided (in particular for cancelled services).

On 1 November 2010, Ofcom issued a Notification to TalkTalk Group under section 94 of the Communications Act 2003 (the Notification) regarding past and ongoing contravention of GC11.1.
TalkTalk Group has until 2 December 2010 to make representations to Ofcom about the matters covered by the Notification, to comply with the requirements of GC11.1 and to remedy the consequences arising from its contravention of GC11.1 during the period 1 January to the date the Notification was issued (1 November 2010).

Ofcom expects that the steps the TalkTalk Group take to comply with GC11.1, may include, but are not limited to, ensuring that it does not render any bill to an end-user unless every amount stated in that bill represents and does not exceed the true extent of the service actually provided to the consumer in question, by:

(i) implementing and maintaining a reporting system which monitors the disconnection process and stops end-users from being billed for services that are not provided to them;

(ii) expediting the process that ensures that, in transferring customer accounts records from previous customer records management systems to a new system, old closed customer accounts are not erroneously re-activated, and that the records held on the new system correspond with those on the old systems; and

(iii) implementing training documentation and briefings for the TalkTalk Group contact centre staff, including detailed training relating to the process involved to correctly disconnect customer accounts when requested by the customer.

Additionally, steps that Ofcom would expect TalkTalk Group to take to remedy any consequences arising from its contravention may include, but are not limited to:

(a) establishing a specialist team within the TalkTalk Group to which any complaints about bills for services not provided to end-users are escalated, on receipt, for resolution;

(b) identifying all end-users of the TalkTalk Group who have been billed by it for services it had not provided to them in the period between 1 January 2010 to the date of the Notification (“the affected end-users”) and writing to these end-users informing them of any monies owed to them, providing the contact details of the specialist TalkTalk Group team (referred to in (a) above) and setting out the steps required to secure payment of any sums due;

(c) suspending all further billing of, and stopping any debt collection activity in relation to, the affected end-users;

(d) providing refunds of all sums paid by end-users to the TalkTalk Group for which it had billed them in contravention of GC11.1;

(e) in relation to any affected end-user whose credit rating has been adversely affected by steps taken by or on behalf of TalkTalk Group, or by any party, in connection with its contravention of GC11.1, taking the necessary steps to repair the affected credit rating, including but not limited to applying to have any relevant court judgment set aside and notifying relevant credit reference agencies;

(f) in relation to any affected end-user against whom TalkTalk Group has instituted legal proceedings to claim monies purportedly owed, withdrawing forthwith from such legal proceedings, and paying the end-user’s reasonable legal costs in resisting the claim; and

(g) paying an appropriate amount to affected end-users in respect of annoyance, inconvenience or anxiety to which they have been put.

Alternatively, TalkTalk Group may, prior to the deadline of 2 December 2010, make representations to Ofcom about how it proposes to remedy fully the consequences arising from its contravention of GC11.1 by a specified date to be agreed with Ofcom. Ofcom is not bound to accept any proposal by TalkTalk Group.

We will now monitor TalkTalk Group’s compliance with the Notification.

A non-confidential version of the Notification is currently being prepared and will be published shortly.

Text published when case was opened

Ofcom has today opened an investigation to consider whether the TalkTalk Group has contravened General Condition 11.1, which prohibits Communications Providers from billing customers for services that have not been provided. In particular, GC11.1 states that:

The Communications Provider shall not render any Bill to an End-User in respect of the provision of any Public Electronic Communications Services unless every amount stated in that Bill represents and does not exceed the true extent of any such service actually provided to the End-User in question.

The opening of this investigation follows an increase in the number of complaints received by the Ofcom Advisory Team alleging that they have been billed by the TalkTalk Group for services that have been cancelled.

If you are a consumer and wish to discuss this case please contact Ofcom's Advisory Team on 020 7981 3040 or 0300 123 3333.

Case Leader: Miriam Martin (email: miriam.martin@ofcom.org.uk)
Case Reference: CW/01051/07/10