Giffgaff fined £1.4m for overcharging millions of customers

Giffgaff has been given 20 working days to pay the fine

Giffgaff has been hit with a fine of £1.4 million by Ofcom after overcharging around 2.6 million customers.

The fine was issued today (July 30) after the industry watchdog ran an investigation on the MVNO that is owned by Telefónica UK and uses the O2 network.

The
investigation found an error in the billing system that has seen
customers overcharged up to £2.9 million.

Ofcom
director of investigations and enforcement Gaucho Rasmussen has
called the situation unacceptable.

“Getting
bills right is a basic duty for every phone company. But Giffgaff
made unacceptable mistakes, leaving millions of customers out of
pocket.

“This
fine should serve as a warning to all communications providers: if
they get the bills wrong, we’ll step into protect customers.”

Giffgaff
has already refunded £2.1 million to affected customers, and donated
money to charity to those customers it hasn’t been able to trace.

The fine
imposed on Giffgaff is 30 per cent less as the MVNO agreed to settle
the case and admitted to the breach.

Goodybags

The
problem arose when Giffgaff customers bought ‘goodybag’ bundles,
which customers can pre-pay for bundles of voice minutes, text
messages and data.

However in
this instance customers were overcharged while using their pre-paid
credit after there was a delay in Giffgaff applying the bundle
purchase to their accounts.

This meant
that any calls customers were using or data usage being used at the
time was coming out of customers pre-paid credit instead.

Giffgaff
has been given 20 working days to pay the fine, which will be passed
on to HM Treasury and will also have to pay an additional £50,000
for failing to provide accurate information to two statutory
information requests issued by Ofcom during the investigation.

uSwitch mobiles expert Ernest Doku has called the error from Giffgaff disappointing.

“Giffgaff deserves credit for reporting the mistake to industry watchdog Ofcom and acting quickly to refund 2.1 million customers. But the fact that almost half a million consumers are still out of pocket is disappointing.

“If you are a Giffgaff customer and believe you could have been overcharged, contact your provider as soon as possible.”

In a statement Giffgaff CEO Ash Schofield issued an apology to its customers and said ‘major steps’ has been taken to refund those customers affected.