Vodafone will be fined £4,625,000 by Ofcom for serious and sustained breaches of consumer protection rules. The Ofcom investigation uncovered mis-selling, inaccurate billing and poor complaints handling procedures The penalty is the result of two investigations into Vodafone completed by Ofcom.
One investigation found that 10,452 pay-as-you-go customers lost out when Vodafone failed to credit their accounts after they paid to ‘top-up’ their mobile phone credit. The affected customers collectively lost £150,000 over a 17-month period. Vodafone also failed to act quickly enough to identify or address these problems, which stemmed from the company transferring to a new billing system. Only after Ofcom intervened did the company take effective steps to stop pay-as-you-go customers from paying money for nothing, and to reimburse those affected. Vodafone also breached Ofcom’s billing rules, because the top-ups that consumers had bought in good faith were not reflected in their credit balances.
Although receipts confirming the success of their ‘top-ups’ were issued to some of those customers, Vodafone did not credit any of the customers’ accounts, or provide them with the services they had paid for. Nor did the credit show on customers’ account balances. This practice lasted for 17 months, costing 10,452 pay-as-you-go customers in the region of £150,000. Vodafone staff failed properly to investigate and put things right.
Ofcom’s investigation concluded that Vodafone had breached a General Condition which prohibits the mis-selling of mobile telephone services; and General Condition which prohibits inaccurate billing.
All telecoms providers must have procedures in place that follow Ofcom’s approved Code of Practice for complaints handling. The Code sets minimum standards covering the accessibility, transparency, and effectiveness of providers’ complaints handling processes.
Ofcom’s investigation found that Vodafone provided its frontline customer service staff with insufficient and ambiguous information on when to treat a customer’s call as a complaint. Vodafone’s procedures also failed to ensure that complaints were escalated quickly enough, and that customers received written notification of their right to alternative dispute resolution (ADR) after eight weeks.