Ofcom Fines TalkTalk And Tiscali £3m

Ofcom has fined TalkTalk and Tiscali UK £3m for breaking consumer rules by charging thousands of customers for services they had not received.

The communications regulator launched an investigation in July 2010 after more than 1,000 customers complained about getting incorrect bills.

Ofcom discovered that among those affected were many who had previously cancelled their accounts and were still issued with bills.

After over 62,000 cases were identified between January 1 and November 1, 2010, Ofcom ordered TalkTalk and its subsidiary Tiscali UK to rectify their billing problems by December 2, 2010.

Despite updating record management systems, following the legally-binding notification from Ofcom, the companies continued to incorrectly bill nearly 3,000 customers between December 2, 2010 and March 4, 2011.

As a result of persistent mistakes, Ofcom slapped TalkTalk and Tiscali UK with the multi-million pound fine, to reflect the seriousness of the situation and warn other telecoms companies of the consequences of breaching the rules.

The £3m fine could have been higher, but Ofcom took into consideration that the firms did act to resolve the situation and paid out over £2.5m to compensate more 65,000 consumers.

In a statement released by chief executive of TalkTalk Group PLC, Dido Harding said: "We are pleased that Ofcom has recognised the significant steps we've taken to solve this problem and has acknowledged that the issues surrounding the integration of the Tiscali business in 2010 are behind us.

"We are of course disappointed at the scale of the fine and feel it is a disproportionate penalty.

"However we are striving to continually improve and invest in customer experience and are pleased at the clear progress we are starting to make."

TalkTalk and Tiscali UK will have to pay the fine within 30 days and the funds will go through Ofcom to HM Treasury.