Plusnet has been fined £880,000 by regulator Ofcom for continuing to charge 1,025 landline and broadband customers who had cancelled.
The telecoms firm, owned by BT, broke a fundamental billing rule by charging the customers a total of half a million pounds despite the fact they had cancelled.
Ofcom says that despite Plusnet making repeating attempts to contact all affected ex-customers by letter and phone, it only refunded 356 customers a total of £212,140 – or an average of nearly £600 each – which included interest at a rate of four per cent for each account.
We’ll do you proud? Plusnet – which advertises heavily with that slogan – has been fined £880k by Ofcom
It means 669 customers have lost out on a refund worth nearly £400,000 in total.
Plusnet – which has the advertising slogan: ‘we’ll do you proud’ – has donated the remaining funds to a dozen local charities in lieu of payments owed to the customers it could not contact.
Rules state that company billing systems must recognise that a home phone or broadband line is ‘ceased’ once the customer cancels the service.
An error in Plusnet’s system meant that cancelled lines were still recognised as ‘live’, Ofcom said this morning.
The £880,000 fine must be paid to Ofcom within 20 working days and will be passed on to HM Treasury.
It includes a 20 per cent reduction to reflect Plusnet’s willingness to enter into a formal settlement.
Lindsey Fussell, Ofcom’s consumer group director, said: ‘There can be no margin for error and no excuses when it comes to billing customers correctly.
‘This fine should serve as a reminder to telecoms companies that they must adhere to Ofcom’s billing rules at all times, or face the consequences.’
A Plusnet spokeswoman said: ‘We are very sorry and would like to apologise to the customers affected.
‘We reported this ourselves to Ofcom, and made every effort to contact these customers to arrange a full refund before the investigation started.
‘We would also like to reassure all customers this was an isolated historic issue and we have implemented a number of new robust measures to make sure this doesn’t happen again.’