Telecommunications company Vodafone, which has 20 million customers in the UK, has been slapped with a £4.6 million fine by the regulator Ofcom for “serious” breaches of consumer protection rules.
The penalty is as a result of two separate investigations. During the first probe, Ofcom found that 10,452 pay-as-you-go (PAYG) customers did not get their accounts credited after buying phone credit “top-ups”. This resulted in a collective loss of £150,000 over 17 months between December 2013 and April 2015.
The issue, which occurred following a change in the company’s billing system, was only resolved and customers reimbursed after Ofcom involvement. As a result, Vodafone has been handed a £3.7 million fine for these failings.
The second investigation found that the company failed to comply with Ofcom’s rules on handling customer complaints. The regulator’s report states that Vodafone’s customer service agents were not given sufficiently clear guidance on what constituted a complaint, while its processes were “insufficient to ensure that all complaints were appropriately escalated or dealt with in a fair, timely manner”.
Vodafone’s procedures also failed to ensure that customers were told, in writing, of their right to take an unresolved complaint to a third-party resolution scheme after eight weeks.
The fine for this error is £925,000. The combined £4.6 million fine has to be paid to The Treasury. An additional £100,000 has also been paid by Vodafone to charity to reflect the fact that 30 customers who suffered financial loss have not been reimbursed as Vodafone could not identify them.
“We expect all customers to be treated fairly”
Lindsey Fussell, Ofcom consumer group director, says: “Phone services are a vital part of people’s lives, and we expect all customers to be treated fairly and in good faith. We will not hesitate to investigate and fine those who break the rules.”
In response to the fines, a spokesperson for Vodafone says: “It is clear from Ofcom’s findings that we did not do that [serving customers’ needs efficiently] often enough or well enough on a number of occasions. We offer our profound apologies to anyone affected by these errors.”
The company adds: “We fully appreciate the consequences for our customers of various failures in the migration process over the last three years. We have sought to remedy these through an additional £30 million investment this year in customer service and training including hiring an additional 1,000 new UK-based call centre personnel and more than 190,000 hours of training to improve how we identify and resolve individual customer problems.”