O2 UK gets £10 million wrist slap for overcharging

UK MNO O2 spent almost a decade overcharging customers when they switched, for which Ofcom has belatedly given it a token punishment.

Ofcom only started investigating this malpractice in 2019 but it still took a couple of years to get to the bottom of it. It found that between ‘at least’ 2011 and 2019 an error in the way O2’s systems calculated the final bills for pay monthly mobile customers meant over a quarter of a million people were billed for some charges twice, amount ting to £40.7 million. To the credit of O2’s customers, only £2.4 million of this was actually paid.

Farcically, Ofcom first flagged up this issue in 2011 but somehow allowed it to continue for another eight years. Only after it finally had a proper look at the situation did Ofcom act with any vigour, but the £10.5 million fine is a drop in the ocean for a company that reported £6 billion in revenues in 2019. O2 is belatedly refunding the overcharged customers and throwing in a derisory 4% compensation.

“Mobile customers trust their provider to bill them correctly and fix any errors as quickly as possible,” said Gaucho Rasmussen, Ofcom’s Enforcement Director. “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.”

So that’s alright then, everything’s sorted. British punters can rest assured that if they’re getting ripped off by their mobile provider it will last a decade at most, then Ofcom will definitely put its foot down. The other UK MNOs must be in a blind panic as a result of the threat of being fined 0.2% of their annual revenues.

Ofcom says it will publish the full results of its investigation ‘shortly’, which could mean anything. Hopefully it will offer greater insight into what precisely went wrong to allow this chronic malpractice. One intriguing question concerns how much its BSS vendors may have been to blame.

UPDATE – 16:00, 15/2/21: We concluded the original piece with the following sentence in reference to the BSS vendors O2 UK could have been using during the period in question: “Netcracker definitely appears to be one such vendor.” While there was no intention to infer culpability on the part of Netcracker, on reflection we concede that the sentence could be interpreted that way so we have removed it.