Ofcom fines BT for deliberately keeping customers in the dark

Following an investigation, the UK regulator ruled that mobile giant EE and broadband operator Plusnet, both hailing from the BT stable, did not provide clear contract information to a sizeable number of customers before they signed up for services.

Regulations introduced by Ofcom in June 2022 require service providers to give consumers and small businesses clear details of their contract – including a summary of its key terms – before they sign on the dotted line. These details must include information on the price and length of the contract, service speed, and early exit fees.

EE and Plusnet did not comply with that rule for as many as 1.3 million sales in the period from June 2022 to September the following years, impacting on at least 1.1 million customers; some customers signed up to more than one service.

And to make matters worse for the UK incumbent, this is not a case of mere oversight. Ofcom discovered that BT both knew what it was doing and saved money in the process.

"Evidence we have gathered shows that BT was aware from as early as January 2022 that some of its sales channels would not meet the deadline," the regulator said, in a statement. "In some cases, BT deliberately chose not to comply with the rules on time. Other providers dedicated the resource required to meet the implementation deadline for these new rules, and BT is likely to have saved costs by not doing so."

Ouch.

Ofcom did not give a steer on how much BT might have saved by ignoring the deadline, but doubtless some or all of that sum will be swallowed up by the fine it now has four weeks to pay.

Ofcom didn't put it quite like that. It explains that the magnitude of the fine "reflects the seriousness of the breach."

In addition to parting with its hard-earned cash – the fine was 30% lower than it might have been because BT admitted liability to settle the case, incidentally – the telco will have to undertake a number of other remedies.

BT has already contacted the majority of the customers affected by the breach, giving them the opportunity to request the information they should have been given and/or cancel their contract without charge. However, some customers had already left the telco before the end of their contract and may have been charged an early exit fee, something they should not have had to pay given that they were not provided with the required information before signing up.

BT now has five months to identify and refund the latter group, and three months to contact any remaining customers it has not previously been in touch with and offer them the right to their contract information or to be able to cancel with no exit charge.

It must also bring all its remaining sales processes into compliance with the rules. In most cases it has three months to do this, but there's a five-month deadline for third party retail stores.

"When we strengthened our rules to make it easier for consumers to compare deals, we gave providers a strict timeline by which to implement them. It's unacceptable that BT couldn't get its act together in time, and the company must now pay a penalty for its failings," said Ian Strawhorne, Ofcom Enforcement Director, in a fairly strongly worded statement.

"We won't hesitate to step in on behalf of phone and broadband customers when our rules to protect them are broken," he added.

That sounds like a warning to BT's rivals. Ofcom is flexing its regulatory muscle and as a consumer it's hard to argue with that. Knowledge is power, after all.

UPDATE - 14:45 22 May 2024 – BT contacted us with the following statement: “We’re sorry that some of our Pre-Contract information and Contract Summary documents were not available to some of our customers in a timely manner.  We apologise for any inconvenience caused and have taken steps to proactively contact affected customers and arrange for them to receive the information and be refunded where applicable. We take compliance seriously at BT and we’re working closely with Ofcom to implement the remedial actions as a result of their findings.”