Ofcom has given TalkTalk and Tiscali UK a slap on the wrist for breaching telecoms rules and has threatened them with further enforcement action, including a possible financial penalty.
The UK regulator said it has received over 1,000 complaints in 2010 from TalkTalk and Tiscali UK customers who were miffed that the companies had billed consumers for services they have not provided, breaching telecoms regulations in the process. Both the firms have issued bills for services consumers had cancelled, according to Ofcom.
To tackle the problem, Ofcom has given both firms, which are part of the TalkTalk Group, a legally-binding notification, forcing them to comply with the rules by 2 December or feel its wrath. The maximum penalty is a fine of 10 percent of relevant turnover.
As part of the notification, both firms will also have to make it up to wronged customers and Ofcom has suggested providing refunds to all consumers billed for cancelled services since 1 January 2010, ceasing debt collection action and withdrawing any legal proceedings if started as well as paying reasonable legal costs. It also recommended they should take any necessary steps to repair credit ratings of any affected customers.
As part of its investigation, Ofcom looked at customer complaints plus the firms' customer records.
Among the affected customers, Ofcom found one woman switched her landline from TalkTalk to another provider but continued to be billed, sought to resolve the issue but received no confirmation she had been successful. TalkTalk's customer records reportedly showed £109.77 was demanded from the woman.
Another woman told the watchdog she cancelled her account with Tiscali UK in February 2006 but got a bill from debt collectors for the cancelled package totalling over £609 for services she hadn't received.
Meanwhile, a man complained to Ofcom this May that after cancelling his broadband account with Tiscali in 2008 he was still getting bills 2 years later. He was reportedly contacted by a debt collection company and accused of owing £353.99 to the company.
Ofcom's director of consumer affairs, Claudio Pollack said: "Ofcom is determined to stand up for consumers and take action against companies that break the rules. Our investigation into TalkTalk and Tiscali UK found that they had billed customers for cancelled services; this is unacceptable which is why we have ordered them to clean up their act or face the consequences."