BT Group is facing a class-action lawsuit over claims it failed to compensate elderly customers who were overcharged for landlines for eight years. In 2017, telecoms watchdog Ofcom found that BT had been overcharging 2.3 million landline customers since 2009.

Law firm Mishcon de Reya has launched an opt-out collective action, Justin Le Patourel v BT Group Limited, in the Competition Appeal Tribunal, which seeks to represent over 2 million of BT’s most loyal customers.

The action relates to consumers who were overcharged for their standalone residential landlines (home phones) from at least 1 October 2015 and represents a claim of nearly £600 million. A high proportion of the consumers affected are older (75+) and from low-income brackets. They have, essentially, been penalised with higher prices because of their loyalty. Some class members are in fact still being overcharged. The class members are represented by Mr Justin Le Patourel, a leading telecoms switching expert and consumer champion who previously held various consumer policy roles at Ofcom.

The claim is based on conclusions made by Ofcom as part of a 2017 review which found that BT had significant market power, was a price-leader, and was overcharging standalone landline customers for line rental services. Ofcom therefore considered that there should be an initial price cut of between £5 and £7 in monthly line rental to address the serious consumer detriment it had identified. BT agreed to provide a price reduction of £7 per month for three years to end the investigation but this did not cover all those we consider were overcharged and was only forward looking.

The action seeks compensation for the historic overcharges and for individuals who were excluded from BT’s voluntary reduction. The action is one of only a handful of its kind since changes to allow these types of consumer collective actions were introduced in 2015.

Mischon de Reya Partner Rob Murray who is representing Le Patourel said “The claims of customers directly harmed by BT’s exploitative behaviour are precisely the type of claims the collective actions regime is designed to deal with. We hope very much that a settlement can be reached to resolve them in line with BT’s acceptance of the need to avoid overcharging when investigated by Ofcom.”

Managing Associate Natasha Pearman said, “This is a specialist claim that will be heard before the Competition Appeals Tribunal. It is a classic example of a loyalty penalty, which were the subject of a super complaint by Citizens Advice, due to their harmful effects on consumers.  It will take time to gather evidence and bring it to trial, but we are very confident that eventually millions of BT’s most loyal customers will receive a significant rebate.”

Rocio Concha, Which? Director of Policy and Advocacy, said “Which? has campaigned long and hard for an effective collective redress scheme, but with no claim under the new regime reaching a full trial, consumers have not yet had the results they need.”

“If successful, this opt-out action would be welcomed by many BT customers who were found to have been historically overcharged for years, but saw no refund as a result.”