Ofcom fines O2 £10.5m for overcharging customers
Ofcom has fined O2 £10.5m, after billing errors meant it overcharged mobile customers who left the mobile provider.
Our rules require telecoms companies to provide customers with accurate bills and charges. In 2019, we opened an investigation into potential issues with the way O2 was billing customers who were leaving it.
What our investigation found
When a customer leaves a mobile provider, the company provides a final bill setting out any remaining fees and charges the customer has to pay before their account is closed. Between at least 2011 and 2019, an error in the way O2’s systems calculated the final bills for pay-monthly mobile customers meant many people were billed for some charges twice.
In total, over 250,000 customers were billed for these incorrect charges, amounting to a total of £40.7m in overcharging. Around 140,000 customers actually paid the extra charges, paying a total of £2.4m.
O2 had initially identified issues with its billing processes in 2011, but efforts to address these problems were not successful and customers continued to be overcharged.
We found that O2 breached its rules, and we have fined the company £10.5m. O2 has accepted the findings of the investigation.
The money raised from the fine will be passed on to HM Treasury.
Refunds for customers
O2 has refunded in full the customers affected for the extra charges they paid, plus an additional 4%. For those customers that O2 has not been able to reach, it has committed to make a donation to charity for the equivalent amount of money those customers were overcharged. It has also changed its billing processes to prevent this issue from happening again.
Any customers with evidence that they were affected by these billing errors, but who have not yet been refunded, are advised to contact O2 directly.
Mobile customers trust their provider to bill them correctly and fix any errors as quickly as possible. But these billing issues continued for a number of years without sufficient action from O2, and thousands of customers were overcharged as a result. This a serious breach of our rules and this fine is a reminder that we will step in if we see companies failing to protect their customers.
O2 has refunded the customers who were affected, and we are satisfied the company has taken action to prevent this happening again.
Gaucho Rasmussen, Ofcom’s Enforcement Director
We will publish the full findings from our investigation shortly.