Own initiative investigation into Plusnet plc about its compliance with metering and billing requirements.

22 March 2017

Complainant: Ofcom own-initiative 
Investigation against: Plusnet plc
Case opened: 27 May 2016
Case closed: 22 March 2017
Issue: Whether Plusnet (part of the BT Group) had complied with its obligations under General Condition 11 requiring Communications Providers  (“CPs”) to accurately bill consumers for their usage of communication  services. 
Relevant instrument: General Condition 11 (specifically 11.1) of  the General Conditions of Entitlement (“GCs”).

Following our investigation Ofcom issued Plusnet with a notification under section 96A of the Communications Act 2003 (the “Act”) on 13 February 2017, as we had reasonable grounds to believe that Plusnet contravened GC 11.1 of the General Conditions. The section 96A Notification related to the period between 26 May 2011 and 3 September 2015 (“the relevant period”) in respect of the contravention.

Ofcom also wrote to Plusnet on 28 February 2017 outlining a procedure under which Plusnet could enter into a settlement agreement on the basis of its admission as to the matters notified to it in the section 96A Notification. Pursuant to that procedure, Plusnet wrote to Ofcom on 20 March 2017, admitting its liability in relation to the nature, scope and duration of the contravention.

In light of the evidence and Plusnet’s admissions, Ofcom was satisfied that Plusnet seriously contravened GC 11.1 during the relevant period. It did so by overcharging 1,025 customers a total of £530,775.44 by rendering bills in respect of broadband and telephony services for amounts that did not represent and exceeded the true extent of the service actually provided to them.

Accordingly, Ofcom issued Plusnet with a Confirmation Decision under section 96C of the Act on 22 March 2017.

The Confirmation Decision imposes a financial penalty of £880,000 on Plusnet in respect of its contraventions of GC 11.1 during the relevant period. The penalty includes a discount that reflects Plusnet’s co-operation in settling this matter.

Update note: 14 February 2017

Further to the update note, 6 January 2017, where Ofcom identified that the Notification issued to Plusnet on 28 November 2016 did not accurately reflect changes to Ofcom’s legal enforcement powers, which came into effect in May 2011, Ofcom has now, following investigation, determined that there are reasonable grounds for believing that Plusnet contravened GC11.1 of the General Conditions. Ofcom has therefore issued a Notification to Plusnet under section 96A of the Communications Act 2003 for the time period between 26 May 2011 and 3 September 2015 in respect of the contravention.

Specifically, Ofcom has reasonable grounds to believe that Plusnet contravened GC 11.1 by rendering bills to end-users in respect of broadband and telephony services for amounts that did not represent and exceeded the true extent of the service actually provided to them. Plusnet had continued to bill certain end-users for broadband and telephony service after their service had been cancelled.

Plusnet now has an opportunity to make representations to Ofcom on the matters contained in the Notification before Ofcom makes a final decision in accordance with section 96C of the Act.
End of update note

Update note: 6 January 2017

Ofcom has identified that the Notification issued to Plusnet on 28 November 2016 did not accurately reflect changes to Ofcom’s legal enforcement powers, which came into effect in May 2011.

As this technical change occurred within the period for which we have reasonable grounds for believing Plusnet to be in breach of GC11.1, we have decided to  withdraw the original Notification issued to the company. We now expect to issue a new notification to Plusnet in due course.
End of update note

Update note: 28 November 2016

Following an investigation, Ofcom has determined that there are reasonable grounds for believing that Plusnet (part of the BT Group) contravened GC11.1 of the General Conditions between 7 March 2008 and 3 September 2015. Ofcom has therefore issued a Notification to Plusnet under section 96A of the Communications Act 2003 (the “Act”).

Specifically, Ofcom has reasonable grounds to believe that Plusnet contravened GC 11.1 by rendering bills to end-users in respect of broadband and telephony services for amounts that did not represent and exceeded the true extent of the service  actually provided to them. Plusnet had continued to bill certain end-users for broadband and telephony service after their service had been cancelled.

Plusnet  now has an opportunity to make representations to Ofcom on the matters  contained in the Notification before Ofcom makes a final decision in accordance  with section 96C of the Act.
End of update note

Following consideration of information provided by Plusnet in response to Ofcom’s enquiries, Ofcom has decided to open an investigation into Plusnet’s compliance with GC 11. GC 11 places obligations upon all CPs to, amongst other things, ensure that every amount stated in a bill is accurate.

GC 11.1 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.”

Plusnet has provided information indicating that it may have charged some customers for  a telephone or broadband service that was not live for a period of time between  2008 and 2015. Ofcom has therefore decided to open an investigation that will  examine whether there are reasonable grounds to believe Plusnet has failed to  comply with its obligations under GC 11.

Case Leader: Stephen Green (email: Stephen.green@ofcom.org.uk)
Case Reference: CW/01178/04/16