TalkTalk has been fined £3 million by Ofcom for incorrectly billing thousands of customers.
Industry regulator Ofcom started investigating both companies in July after receiving more than 1,000 complaints. It found that TalkTalk, which took over Tiscali UK last year, had sent bills to customers for services they hadn't received. Between January and November 2010, Ofcom recorded 62,000 cases of this.
Ofcom gave TalkTalk a month to address these billing issues. However, they still incorrectly billed nearly 3,000 customers between 2 December 2010 and 4 March 2011.
Both companies have already paid £2.5 million in good will gestures and compensation. The latest fine, with Tiscali UK paying £1,512,392 and TalkTalk £1,524,728, reflects the “serious breach of rules”, says Ofcom.
Sending a message
Dido Harding, TalkTalk's chief executive officer, says she is "disappointed at the scale of the fine", calling it a "disproportionate penalty".
Harding also insists that issues surrounding the integration of Tiscali UK into TalkTalk in 2010 have now been resolved: "The billing migration was completed last year and in the past three months Ofcom has received only 12 complaints on the issue."
Consumer groups have welcomed Ofcom's actions. Diane Gaston, spokesperson for Consumer Focus, says it sends a clear message to the industry to act fairly towards its customers: "It is totally unacceptable for any company to bill customers for services they haven't used. This is a failure of the most basic customer service.
"It's extremely disappointing that, even after these companies were made aware of the problem and took some steps to fix the issue, they continued to let their customers down."
Richard Lloyd, executive director of Which?, says "it's good to see a regulator showing it's teeth".
"A £3 million fine clearly shows Ofcom is ready to take meaningful action against telecoms companies that break the rules," he adds.