Billing error meant customers were effectively charged twice after purchasing prepaid bundles of minutes, text messages and data
Mobile operator Giffgaff has been fined £1.4 million for overcharging millions of customers, in an error that Ofcom said was “unacceptable”.
Giffgaff, owned by O2 parent Telefonica, overcharged customers to a total of nearly £2.9m, according to regulator Ofcom.
The operator notified Ofcom when it detected the mistake and has refunded the majority of customers, but Ofcom said the firm had blundered in a “basic duty”.
“Getting bills right is a basic duty for every phone company,” said Ofcom director of investigations and enforcement Gaucho Rasmussen. “But Giffgaff made unacceptable mistakes, leaving millions of customers out of pocket.”
Giffgaff has refunded customers about £2.1m, and in cases in which it was unable to contact customers it donated the funds to charity.
The funds it was unable to return to customers amount to some £750,000.
The fine would have been £2m, but Ofcom reduced it after Giffgaff agreed to settle the case and admitted to its mistake.
The error was in the way Giffgaff charged customers who had purchased prepaid bundles of voice minutes, text messages and data.
When customers purchased these bundles, they should have been applied immediately, but Giffgaff delayed doing so.
In the meantime, customers paid for calls and data from their ordinary prepaid balances, meaning they were effectively charged twice.
Giffgaff didn’t apply the bundles until customers completed the voice call they were on or began a new data session, for instance by turning the phone off and on.
“I’d like to apologise again to all those members affected by this and thank you for your ongoing support,” said Giffgaff chief executive Ashley Schofield in a statement.
“As a business, we have already begun – and will be fully – implementing the recommendations within Ofcom’s final decision.”
In April Ofcom said Giffgaff was the mobile phone network with the most satisfied customers.