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Ofcom fines BT £2.8m for customer contract failures

May 22, 2024

UK media regulator Ofcom has fined BT £2.8 million (€3.2m) after it failed to provide more than a million customers with clear and simple contract information before signing up to a new deal.

Ofcom stated that the telco broke its consumer protection rules designed to ensure telecoms customers get clear, comparable information about the services they are considering buying.

Since June 2022, phone and broadband companies have been required to give consumers and small businesses the details of a contract, as well as a short summary of its key terms, before they sign up. This must include information such as the price and length of the contract, the speed of the service and any early exit fees.

Ofcom opened an investigation into BT having received information that two of its wholly-owned subsidiaries – EE and Plusnet – may have failed to provide these documents to some customers. Ofcom have found that, since June 17th 2022, EE and Plusnet made more than 1.3 million sales without providing customers with the required contract summary and information documents. The evidence shows there were at least 1.1 million customers affected by this.

Ofcom engaged with providers during the period before the new rules came into force in June 2022, to ensure they were on track to meet the deadline. BT initially said in February 2022 that it was confident the deadline would be met.

Evidence gathered by the regulator shows that BT was aware from as early as January 2022 that some of its sales channels would not meet the deadline. In some cases, BT deliberately chose not to comply with the rules on time. Other providers dedicated the resource required to meet the implementation deadline for these new rules, and BT is likely to have saved costs by not doing so.

Following engagement with Ofcom, BT contacted 1.1 million customers – the majority of those affected – between June 26th and September 30th 2023, explaining that it had not provided them with the information to which they were entitled. Those customers have been given the opportunity to request the information and/or cancel their contract without charge.

However, before these communications were sent, some customers left BT before the end of their contract and may have been charged an early exit fee. Ofcom rules state that if the required contract summary and contract information is not given, the contract is not binding on customers. As a result, an early exit fee should not have been payable by these customers.

Also, some sales channels are still non-compliant and BT is still not providing the required information at the right time to some customers.

As a result of these failures, Ofcom has fined BT £2,800,000, which it says “reflects the seriousness of this breach”.

As well as fining BT, Ofcom are also requiring it to:

  • identify and refund any affected customers who may have been charged for leaving before the end of their contract period, within five months of this decision;
  • within three months, contact the remaining affected customers who are still with BT and have not already been contacted, to offer them their contract information and/or the right to cancel their contract without charge; and
  • amend remaining sales processes that are still non-compliant to ensure that all customers receive the right information at the right time, in most cases within three months of this decision.

Ian Strawhorne, Ofcom Enforcement Director, commented: “For people to take advantage of the competitive telecoms market here in the UK, they must be able to shop around with confidence. When we strengthened our rules to make it easier for consumers to compare deals, we gave providers a strict timeline by which to implement them. It’s unacceptable that BT couldn’t get its act together in time, and the company must now pay a penalty for its failings. We won’t hesitate to step in on behalf of phone and broadband customers when our rules to protect them are broken.”

Categories: Articles, Broadband, Policy, Regulation, Telco

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