UK mobile network Giffgaff has been hit with a whopping fine after the company effectively charged customers twice what they owed by mistake.
Giffgaff, whose error affected 2.6 million customers, will have to cough up £1.4 million to regulator Ofcom.
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Gaucho Rasmussen of Ofcom said: “Getting bills right is a basic duty for every phone company. But Giffgaff made unacceptable mistakes, leaving millions of customers out of pocket.”
An additional fine of £50,000 was also levied after Giffgaff failed to provide accurate information during the investigation.
The issue occurred because of Giffgaff’s implementation of a ‘goodybag’ contract. There was a delay between the point of purchasing the goodybag and the implentation of the benefits, and in the meantime Giffgaff took payments from customers’ pre-paid accounts for services that they had already paid for in the goodybag.
Giffgaff said in a statement (posted to its forum):
I have an update for you all on the billing issue that came to light last year, in 2018. As you know, as soon as we found out about it, fixed it, and began to refund our members, we also informed Ofcom, the telecoms regulator. Over the past year, we have been working with them as they took a closer look at the issue and opened an investigation to examine whether there are grounds to believe giffgaff charged members incorrectly.
Following this investigation, Ofcom have announced today that they plan on fining us £2 million; however, as we agreed to enter into Ofcom’s settlement process this will be discounted by 30% to £1.4 million. As a business, we have already begun — and will be fully — implementing the recommendations within Ofcom’s final decision.
While Ofcom was conducting their investigation, we made the decision to set aside some funds from our 2018 profits to use in case of a fine. Because of that, we’re able to make sure that this cost will not be passed onto you and it won’t affect the cost of goodybags and/or credit.
We’ve taken major steps to refund the members affected; however, for those whose records we were not able to hold on to, and who we haven’t been able to get in touch with, we’ve made the decision to do something different. We have estimated the potential impact this issue would have had. We did this by looking at our existing data, and used it to project the impact between the time when this issue began, arriving at a figure of £752,257. Clearly, this money doesn’t belong to us, so we will be donating this amount entirely to charity.
On behalf of everyone at giffgaff, I’d like to apologise again to all those members affected by this and thank you for your ongoing support.