26th Oct 2016 06:25
LONDON (Alliance News) - UK telecoms regulator Ofcom on Wednesday said it has fined Vodafone Group PLC a total GBP4.6 million for "serious and sustained breaches of consumer protection rules" following two investigations into the company.
Sky News earlier Wednesday said the penalty was expected to be multi-million pound fine.
Ofcom said the first investigation into the mobile telecoms giant found that 10,452 pay-as-you-go customers lost out when Vodafone failed to credit their accounts after they paid to 'top-up' their mobile phone credit. The affected customers collectively lost GBP150,000 over a 17-month period, the regulator said.
Vodafone also failed to act quickly enough to identify or address those problems, which "stemmed from the company transferring to a new billing system."
"Only after Ofcom intervened did the company take effective steps to stop pay-as-you-go customers from paying money for nothing, and to reimburse those affected," said Ofcom. "Vodafone also breached Ofcom's billing rules, because the top-ups that consumers had bought in good faith were not reflected in their credit balances."
The second investigation found that Vodafone failed to comply with the regulator's rules on handling customer complaints.
"Vodafone's customer service agents were not given sufficiently clear guidance on what constituted a complaint, while its processes were insufficient to ensure that all complaints were appropriately escalated or dealt with in a fair, timely manner," said Ofcom.
"Vodafone's procedures also failed to ensure that customers were told, in writing, of their right to take an unresolved complaint to a third-party resolution scheme after eight weeks," Ofcom added.
The GBP4.6 million penalty is split into GBP3.7 million for taking pay-as-you-go customer money without providing a service in return, with the other GBP925,000 attributable to the flaws in its complaints handling process.
"The penalties incorporate a 7.5% reduction to reflect Vodafone's agreement to enter into a formal settlement, which will save public money and resources. As part of this agreement, Vodafone admits the breaches. It has also reimbursed all customers who faced financial loss, but for 30 it could not identify, and made a donation of GBP100,000 to charity," said Ofcom.
Vodafone issued no statement on the matter early Wednesday.
By Joshua Warner; [email protected]; @JoshAlliance
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