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TalkTalk remains coy on compensation commitments

TalkTalk has declined to comment on what proportion of the £2.5 million it has been ordered to repay to customers is compensation.

Yesterday (28 February) the Office of Communications (Ofcom) revealed the provider had been instructed to repay 62,000 of its customers following billing mistakes. While TalkTalk was not fined by the regulator for the broadband industry, Ofcom hinted that similar mistakes by internet providers could result in hefty fines in the future if a proposed law change is adopted later this year.

The industry watchdog also conceded that publicity around the case could lead to further customers coming forward, not just from TalkTalk, but also from customers experiencing similar issues from other broadband providers. In a statement from Ofcom it was revealed that it’s investigation into TalkTalk UK (and Tiscali which previously owned the network) had resulted in almost £2.5 million in refunds and good will payments after thousands of consumers were incorrectly billed for cancelled services.

When SeekBroadband.com asked TalkTalk if all the affected customers had been reimbursed and what proportion of the £2.5m were “good will” payments (as opposed to refunds), the provider declined to comment. In a statement TalkTalk said: “We’re pleased that Ofcom has recognised the significant steps we’ve taken to fix the billing issues identified.  We moved all of our customers to our single billing platform at the end of January and our focus on resolving any outstanding billing issues continues.

We remain committed to providing great value and service to our 4.2 million phone and broadband customers.” Ofcom opened an investigation into TalkTalk and Tiscali UK in July 2010 following complaints from over 1,000 consumers. Both were issued with a legally-binding notification in November 2010 and set a deadline of 2 December 2010 to take steps to comply with telecoms rules which prohibit communications providers from billing customers for services that haven’t been provided. TalkTalk and Tiscali UK were also required to remedy the breach of the regulations by the same date, for example, by paying refunds to affected customers.

When SeekBroadband.com asked Ofcom if TalkTalk had reimbursed all its customers, a spokesperson said the regulator “was still trying to establish this” and that the investigation remained open. This was partly due to the fact that the watchdog was still receiving complaints about the issue from TalkTalk customers. If the investigation reveals that TalkTalk or Tiscali UK have continued to breach the regulations, they could still face further enforcement action including a financial penalty. The spokesperson also said: “Publicity does drive complaints on similar issues.”

Ofcom is not in a position at present to impose a financial penalty, however, the Government is currently consulting on changes to the law. Under these changes, Ofcom would be able to issue a financial penalty for breaches of the regulations, regardless of whether a company subsequently took action to address the problem. If the Government decides to proceed with these changes, these new powers would be available to Ofcom on 25 May 2011. Ofcom said it welcomed the proposed changes to the law but was not able to say if TalkTalk would have definitely received a fine under these circumstances. The Ofcom spokesperson said: “It is difficult to say as such a law is not yet in place and it really would depend on the ins and outs of each individual case.”