Ofcom forces Tiscali, TalkTalk into £2.5m refund

UK ISPs Tiscali and Talk Talk have paid out £2.5 million in refunds and goodwill payments since receiving a slap from Ofcom for incorrectly billing customers for cancelled services.

The UK telecoms watchdog began investigating complaints against the companies last July, after more than 1,000 customers complained that the companies had continued to bill them long after they had cancelled their services.

One customer told Ofcom he had been pursued by a debt collection company for £353.99 that it said he owed to Tiscali UK, after the company continued to bill him two years after he had cancelled his broadband account in 2008.

Ofcom issued both companies with a legally binding notification last November, ordering them to make amends by December 2nd.

In a statement released today, Ofcom says that it was unable to impose a financial penalty because both Tiscali and TalkTalk took "significant steps to fix the problem" before the deadline, including identifying and compensating 62,000 affected customers.

But Ofcom says it is still receiving complaints about the matter - and today warned that if further investigation reveals that either company is continuing to breach regulations, a fine may be imposed.

The regulator also noted that the government is currently consulting on a change in the law that will enable Ofcom to impose a fine, whether or not a company has taken steps to fix the problem. If accepted by the government, the new power will be available to Ofcom by May 25th.

Talk Talk or Tiscali customers who have been affected by this issue are advised to call the companies' dedicated hotline on 0800 5428 073.