Phone network GiffGaff has lighter pockets this morning, to the tune of £1.4m, after being slapped with a fine by telecoms regulator Ofcom after overcharging around 2.6 million customers.
The fine comes as a result of an Ofcom investigation into the company, which is actually owned by Telefonica, the same parent company as O2. It found that overall, GiffGaff had overcharged customers £2.9m - though the company has already refunded around £2.1m. For customers it couldn't trace, it donated their refunds - worth around £750,000 - to charity.
Apparently the problem was caused by some dodgy bundling. GiffGaff customers can pre-pay for "goodybags", an infantilised name for bundles of voice minutes, texts and data. The problem is that these bundles were not always being applied to customer accounts quick enough, so customers ending up paying for what they thought were bundled calls, texts and data out of their normal prepaid credit.
The good news for GiffGaff is that though this pretty bad, it could have been worse: The fine is actually a 30 per cent reduction on what it could have been, because GiffGaff was diligent enough to report the screw-up to Ofcom itself, and had already started refunding customers.
Gaucho Rasmussen, Ofcom's Director of Investigations and Enforcement, laid the smackdown on the company, saying that “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 bills wrong, we’ll step in to protect customers.”