The UK mobile and broadband provider Vodafone has been issued a record fine of £4,625,000 by Ofcom due to its breach of a number of consumer complaint rules.
The telecom has already been experiencing a great deal of backlash from its customers and has received more complaints than its rivals regarding its mistreatment of customers. As a result, Ofcom has been conducting two separate investigations into Vodafone's business practices.
The first involves the company's complaint handling procedures and the second is looking into the telecom's billing practices regarding its pay-as-you-go (PAYG) services. Ofcom issued its judgement on both cases today and the regulator's Consumer Group Director, Lindsey Fussel offered an explanation as to why Vodafone has been fined so heavily, saying: “Vodafone's failings were serious and unacceptable, and these fines send a clear warning to all telecoms companies. Phone services are a vital part of people's lives, and we expect all customers to be treated fairly and in good faith. We will not hesitate to investigate and find those who break the rules.”
Regarding its PAYG customers, Vodafone took money from them without providing a service in return. This occurred after the company had moved these customers to a new billing system and failed to resolve the issue afterwards. Around 10,452 PAYG customers lost a combined £150,000 over the course of a 17-month period when the telecom did not credit their accounts despite the fact that they paid to do so.
Ofcom was critical of how Vodafone handled the situation and it noted that the telecom did not do anything to rectify it until after the regulator became aware of what was going on. Only at that point, did Vodafone “take effective steps to stop pay-as-you-go customers from paying money for nothing, and to reimburse those affected.” This led Ofcom to issue the telecom a fine of £3,700,000.
When it came to the issue of complain handling, the regulator found that Vodafone's own employees “were not given sufficiently clear guidance on what constituted a complaint, while its processes were insufficient to ensure that all complaints were appropriately escalated or dealt with in a fair, timely manner.”
Vodafone has since apologised for its errors, with a spokesperson for the company, saying: “Everyone who works for us is expected to do their utmost to meet our customers' needs. It is clear that Ofcom's findings that we did not do that often enough or well enough on a number of occasions. We offer our profound apologies to anyone affected by these errors.”
Though the fines it is being charged are quite high, they will likely not affect Vodafone's business in the UK. However, the bad press associated with Ofcom's findings may lead even more customers to turn away from the company.
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