EE fined £2.7m for overcharging consumers by Ofcom

Telecommunications watchdog Ofcom has imposed a fine of £2.7m on EE mobile for overcharging calls to customer service by roaming subscribers.

EE charged £1.20 a minute instead of 19p a minute to subscribers who called the 150 number while roaming in the EU region.

With effect from 18 November 2015, EE subscribers who roamed in the EU region could make calls to the customer service number 150 and pay 19p a minute for the same. While it is not clear how many customers noticed it, but Ofcom found that between 18 November 2015 and 11 January 2016, EE continued to charge roaming subscribers to the tune of £1.20 a minute instead of the new rate, thus overcharging as many as 32,145 customers and pocketing £245,700 in total.

Ofcom found that EE charged these customers as if they were calling the United States instead of EE's customer service number. The watchdog also found that despite making calls and texts to 150 customer service number free from within the EU from 18 November 2015, EE overcharged 7,674 customers £2,203.33 until 11 January but the network refunded the affected customers.

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"Ofcom’s investigation found that EE’s carelessness or negligence contributed to these billing errors. In addition, while it did not set out to make money from its billing mistake, EE had decided not to reimburse the majority of affected customers until Ofcom intervened. EE wrongly decided it couldn’t identify the people it overcharged and was proposing to give their money to charity, which would have left them out of pocket," said an Ofcom report.

“EE didn’t take enough care to ensure that its customers were billed accurately. This ended up costing customers thousands of pounds, which is completely unacceptable. We monitor how phone companies bill their customers, and will not tolerate careless mistakes. Any company that breaks Ofcom’s rules should expect similar consequences,” said Lindsey Fussell, Ofcom’s Consumer Group Director.

EE has been asked by Ofcom to pay £2,700,000 within 20 days which will go to the treasury. The final amount is a settlement whereby EE received a 10% reduction for owning up and taking full responsibility for the breaches. The terms of the settlement include EE's commitment to trace every affected customer and refund him/her at the earliest.

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EE has responded to Ofcom's findings and subsequent action, stating that the billing issue in question affects less than 0.1% of its user base and that it has refunded every customer who it could locate. For customers it could not locate as they have subsequently left the network, EE has donated an equivalent amount to charity as per Ofcom's guidelines. Out of 32,145 affected customers, EE has been able to locate and contact 26,000 of them.

"We accept these findings and apologise unreservedly to those customers affected by these technical billing issues between 2014 & 2015. We have put measures in place to prevent this from happening again, and have contacted the majority of customers to apologise and provide a full refund. For those customers that we could not identify, we donated the remaining excess fees to charitable causes in line with Ofcom’s guidelines,”said an EE spokesperson.

“Providing the best network experience and best customer service for EE customers in store, online and over the phone through our UK and Ireland-based centres are our top priorities. Following Ofcom’s findings, we have made a number of additional improvements to our systems and policies to allow us to better support our customers in the rare occasion that billing issues do occur,” the spokesperson added.

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"To be fined for two separate instances of overcharging customers, that took place within the course of six months doesn't evoke customer confidence. Although EE have apologised and promised to provide a refund, OFCOM have said they didn't do so until the telecoms regulator intervened," said Sunetra Chakravarti, Editor at Mobile Choice.

"These issues affected 40,000 customers and came about because of the lack of financial checks and balances- an issue that could have been easily addressed internally. I am particularly worried that EE still haven't managed to identify all customers affected by this major billing mistake. A consumer doesn't usually ring customer services for a chit-chat. It is to discuss their phone plan, and to over-charge these customers an average £9.42 for that is just not right. I would be furious if it was me," she added. 

This is the second such major fine imposed by Ofcom on a major network operator after it imposed a fine of £4,625,000 on Vodafone for 'serious and sustained breaches of consumer protection rules' last year. Ofcom found that Vodafone’s customer service agents didn't have a clear view on what constituted a complaint and the escalation mechanism was neither appropriate nor timely. Vodafone also failed to inform customers in writing that they had the right to get their complaints resolved via third party resolution scheme after eight weeks.

"As a result of these failings, two penalties have today been imposed against Vodafone: £3,700,000 for taking pay-as-you-go customers’ money without providing a service in return; and £925,000 for the flaws in its complaints handling processes," said Ofcom in a press release.

Source: Ofcom

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