Friday 12 February 2021 8:56 am

O2 hit with £10.5m Ofcom fine after overcharging customers

O2 has been slapped with a £10.5m fine after a billing error meant the mobile network overcharged thousands of customers.

More than 250,000 customers were presented with inflated bills when they left the network due to a system error that doubled up some charges.

Read more: Mobile rivals raise competition concerns over £31bn O2-Virgin merger

Roughy 140,000 people actually paid the extra fees between 2011 and 2019, amounting to a total of £2.4m.

Ofcom, which opened an investigation into O2’s billing methods in 2019, said the company had identified problems with its bills in 2011 but failed to address the issue.

The media regulator said O2 had breached its rules by failing to provide customers with accurate bills and handed down a fine of £10.5m.

The figure marks a 30 per cent reduction on the full £15m penalty, which Ofcom said reflected O2’s acceptance of the findings.

But O2 said it was disappointed with the level of the fine, which it described as “disproportionate”.

“Mobile customers trust their provider to bill them correctly and fix any errors as quickly as possible, but these billing issues continued for a number of years without sufficient action from O2, and thousands of customers were overcharged as a result,” said Gaucho Rasmussen,  Ofcom’s enforcement director.

“This is 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 affected customers in full, plus an additional four per cent. It has also changed its billing process to ensure the error does not happen again.

Read more: Competition watchdog refers O2-Virgin merger for in-depth investigation

“As the operator proactively driving over £168m value back to our customers in the last year alone, we are disappointed by this technical error and sincerely apologise to customers impacted,” an O2 spokesperson said.

“We identified the issue ourselves and notified our industry billing auditor. We have also taken proactive steps to refund all impacted customers for the extra charges they paid, plus an additional four per cent.”