Ofcom fines BT £2.8m for knowingly breaching contract info rules

22nd May 2024 07:18

(Sharecast News) - Ofcom announced on Wednesday that it has fined BT Group £2.8m, for failing to provide more than one million customers with clear and essential contract information before signing up for services with its subsidiaries EE and Plusnet.

The communications regulator said the breach of consumer protection rules affected at least 1.1 million customers who were not given contract details required by regulations implemented on 17 June 2022.

It said the regulations mandated that telecom providers must provide consumers and small businesses with comprehensive contract information, including the price, length of the contract, service speed, and early exit fees, prior to signing up.

Ofcom said its investigation found that from 17 June 2022, EE and Plusnet made over 1.3 million sales without supplying the necessary contract summaries and information documents.

Despite BT's assurance in February 2022 that it would meet the compliance deadline, evidence indicated that BT was aware from January 2022 that some sales channels would not comply.

In some instances, BT chose not to comply with the rules on time, potentially saving costs compared to other providers who allocated resources to meet the deadline.

Between 26 June and 30 September 2023, BT contacted 1.1 million affected customers, informing them of the oversight and offering the necessary information and the option to cancel their contracts without penalty.

However, some customers who left BT before their contract ended were charged early exit fees, contrary to Ofcom's rules that such fees should not be applicable if the required contract information was not provided.

Additionally, some BT sales channels remain non-compliant, and the required information is still not being provided at the right time to some customers, Ofcom said.

In response to the failures, Ofcom said the £2.8m fine underscored the seriousness of the breach.

BT would also be required to take several remedial actions.

The company must identify and refund any customers who were improperly charged early exit fees within five months.

BT would also be required to contact any remaining affected customers within three months to offer the contract information and the right to cancel without charge.

Additionally, BT must amend any non-compliant sales processes within three months to ensure all customers receive the correct information timely.

"For people to take advantage of the competitive telecoms market here in the UK, they must be able to shop around with confidence," said Ofcom enforcement director Ian Strawhorne.

"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."

At 0907 BST, shares in BT Group were up 0.89% at 129.14p.

Reporting by Josh White for Sharecast.com.