Ofcom Issues £1.4 Million Fine to Giffgaff for Goodybag Failings

Ofcom, the telecoms regulatory body, has issued fines to companies such as EE, Virgin Media, and O2 in the last year for failures of service and breaking the law. The latest telecoms company to receive a hefty fine from Ofcom for misbehaviour is Giffgaff. Recently the news broke that Ofcom was fining the mobile phone operator for billing errors which cost 2.6 million customers up to £2.9 million over 8 years. Despite topping the Which? customer survey for best mobile operator back in April, Giffgaff now has to pay £1.4 million.

What mistakes did Giffgaff make?

Giffgaff repeatedly made the same mistakes from May 2011 up to June 2018. Over this 7-8 year period, customers purchasing Giffgaff goodybag bundles ended up being charged extra when these allowances were not applied right away. The bundles were only applied when the customer finished a pre-paid phone call or switched their phone off and on again. Until they did this, they were being charged twice for the same usage. This happened to around 2.6 million customers, some of whom may not have even realized it. The error was still affecting Giffgaff voice services up until February 2019. Ofcom said that this overcharging due to consistent mistakes was totally unacceptable.

What has Ofcom done about Giffgaff?

The Ofcom investigation ruled that Giffgaff had made severe failings in this case, which Giffgaff did not dispute. They discounted the resulting fine by 30% due to Giffgaff self-reporting the problem (though they had to add an extra £50,000 to the fine due to Giffgaff also failing to provide evidence in response to 2 statutory information requests). The final penalty would have been £2 million, but Ofcom reduced it by 30% because of Giffgaff’s overall compliance. Ofcom is encouraging companies to self-report as Giffgaff did, but they hope this case will deter businesses from overlooking such errors.

What do the experts say about Giffgaff?

Ofcom’s director of investigations and enforcement, Gaucho Rasmussen, emphasises that accurate billing is a basic duty. He said that the severe fine for Giffgaff should serve as a “warning” to other communication providers. Rasmussen also said that leaving so many customers out of pocket was an “unacceptable” mistake and that Ofcom will always step in to protect the interests of customers. Meanwhile, a mobile analyst for comparison site uSwitch, Ernest Doku, says that Giffgaff does deserve some credit. Giffgaff did report the problem to Ofcom themselves and took action to refund the affected customers. However, he also says that it is still disappointing that at least half a million customers who lost money haven’t been refunded yet.

Is Giffgaff going to refund customers?

Giffgaff has already issued £2.1 million in refunds to the customers they identified as being victims of this billing error. Sometimes, they have not been able to trace customers to refund them. In these cases, Giffgaff has been donating the refund money to charity. This is around £750,000 and will go to 10 charities previously nominated by Giffgaff customers. Chief Executive at Giffgaff, Ashley Schofield, issued a public apology on their website. He reassures customers that Giffgaff is complying with Ofcom to make sure that this does not happen again. Giffgaff will pay the fine to the Treasury as per Ofcom’s ruling. If you think that you may have been one of the affected customers then check if you are entitled to a refund from them.