REG - OFCOM - Ofcom fines BT £2.8m for failing customers

BTAnnouncement

22/05/2024 08:15

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RNS Number : 3303P  Office of Communications  22 May 2024

22 May 2024

 

Ofcom fines BT £2.8m for failing its EE and Plusnet customers

 

·    EE and Plusnet - owned by BT - failed to implement new rules that
help customers shop around

·    At least 1.1 million customers were not given contract information
before they signed up

·    BT must refund early exit fees, and let existing affected customers
walk away penalty-free

 

Ofcom has today fined BT £2.8m after it failed to provide more than a million
customers with clear and simple contract information before signing up to a
new deal.

 

The company broke our consumer protection rules designed to ensure telecoms
customers get clear, comparable information about the services they are
considering buying.( 1 )

 

Since 17 June 2022, phone and broadband companies have been required to give
consumers and small businesses the details of a contract, as well as a short
summary of its key terms, before they sign up. This must include information
such as the price and length of the contract, the speed of the service and any
early exit fees.

 

We opened an investigation into BT having received information that two of its
wholly-owned subsidiaries - EE and Plusnet - may have failed to provide these
documents to some customers.

 

What our investigation found

 

We have found that, since 17 June 2022, EE and Plusnet made more than 1.3
million sales without providing customers with the required contract summary
and information documents. The evidence shows there were at least 1.1 million
customers affected by this.( 2 )

 

Ofcom engaged with providers during the period before the new rules came into
force in June 2022, to ensure they were on track to meet the deadline. BT told
us in February 2022 that it was confident the deadline would be met.

 

Evidence we have gathered shows that BT was aware from as early as January
2022 that some of its sales channels would not meet the deadline. In some
cases, BT deliberately chose not to comply with the rules on time. Other
providers dedicated the resource required to meet the implementation deadline
for these new rules, and BT is likely to have saved costs by not doing so.

 

Following engagement with Ofcom, BT contacted 1.1 million customers - the
majority of those affected - between 26 June and 30 September 2023, explaining
that it had not provided them with the information to which they were
entitled. Those customers have been given the opportunity to request the
information and/or cancel their contract without charge.

 

However, before these communications were sent, some customers left BT before
the end of their contract and may have been charged an early exit fee. Our
rules are clear that if the required contract summary and contract information
is not given, the contract is not binding on customers. As a result, an early
exit fee should not have been payable by these customers.

 

Also, some sales channels are still non-compliant and BT is still not
providing the required information at the right time to some customers.

 

Financial penalty, customer refunds and remedial action

 

As a result of these failures, Ofcom has decided to fine BT £2,800,000, which
reflects the seriousness of this breach.( 3 )

 

As well as fining BT, we are also requiring it to:

 

·    identify and refund any affected customers who may have been charged
for leaving before the end of their contract period, within five months of
this decision;

·    within three months, contact the remaining affected customers who are
still with BT and have not already been contacted, to offer them their
contract information and/or the right to cancel their contract without charge;
and

·    amend remaining sales processes that are still non-compliant to
ensure that all customers receive the right information at the right time, in
most cases within three months of this decision.( 4 )

 

Ian Strawhorne, Ofcom Enforcement Director, said: "For people to take
advantage of the competitive telecoms market here in the UK, they must be able
to shop around with confidence.

 

"When we strengthened our rules to make it easier for consumers to compare
deals, we gave providers a strict timeline by which to implement them. It's
unacceptable that BT couldn't get its act together in time, and the company
must now pay a penalty for its failings.

 

"We won't hesitate to step in on behalf of phone and broadband customers when
our rules to protect them are broken."

 

End

 

Notes to editors:

 

1.    The relevant Ofcom rules - known as General Conditions (GCs) - that
BT broke are GCs C1.3 to C1.7, which set out requirements for providers in
relation to the information they must provide to consumers and small
businesses before they enter into a contract.

2.    The number of individual customers affected by the contravention is
likely to be smaller than the number of affected sales because some customers
will have purchased more than one service affected by the failure.

3.    BT must pay the fine within four weeks of this decision, and it will
then be passed on to HM Treasury. It includes a 30% reduction as a result of
BT's admission of liability and agreement to settle the case.

4.    Sales made via third party retail stores that are still non-compliant
must be amended within five months.

 

 

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