TalkTalk pays £2.5 million for billing blunder

TalkTalk has been forced to pay 2.5 million worth of refunds after an investigation by regulator Ofcom found it had charged some 62,000 of its customers for services they hadn't used.

TalkTalk was formally warned by Ofcom which had received more than 1,000 complaints - in November 2010.

Affected customers also protested about action pushed by debt collection agencies, allegedly sent by TalkTalk, to demand payment they didn't owe. Such actions may have had harmful consequences to customers' credit ratings.

Affected customers who paid out after January 2010 must now be refunded. An average of 40 will be paid to them in compensation, and credit rating agencies will also be told to repair their credit histories.

Although TalkTalk was at first given until 2 December to fix the problems, the broadband provider failed to do so and Ofcom granted the company more time to make the necessary changes in their billing system.

Ofcom issued a statement in which it confirmed TalkTalk had taken "significant steps" to repair the problem and fulfil its obligations.

However, Ofcom's statement added: "Despite the actions taken by TalkTalk Group, Ofcom is still receiving some complaints from consumers. In light of these and information from TalkTalk Group, Ofcom will continue its investigation into TalkTalk Group's compliance with GC11.1 by 2 December (and thereafter)."

"If the investigation reveals that TalkTalk Group has continued to breach GC11.1, Ofcom will consider further enforcement action, which may include issuing a financial penalty."

When contacted by IT PRO and asked about Ofcom's accusations, TalkTalk referred us to an official statement.

"We're pleased that Ofcom has recognised the significant steps we've taken to fix the billing issues identified," TalkTalk said.

"We moved all of our customers to our single billing platform at the end of January and our focus on resolving any outstanding billing issues continues. We remain committed to providing great value and service to our 4.2 million phone and broadband customers."

TalkTalk also told IT PRO it had provided Ofcom with the number of customers affected and the level of compensation it had paid out.

The ISP insisted it was satisfied with its own reaction, since the commitment it made to moving all its customers to a single billing platform by the end of January 2011 was achieved.

When asked by IT PRO about the threat of further Ofcom enforcement action, which may include another financial penalty if problems and complaints persist, TalkTalk said its focus lay elsewhere.

"Our focus remains on resolving any outstanding issues," a spokesperson said.