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BT faces £600m ‘landline overcharge’ lawsuit

Paloma Kubiak
Written By:
Paloma Kubiak

BT is set to ‘vigorously defend’ itself against a £600m claim of ‘historic excessive pricing’ for elderly and vulnerable landline customers.

The telecoms giant is accused of anti-competitive behaviour towards its landline-only customers.

As part of the class action claim, more than two million customers could be owed £500 each in compensation after being overcharged for landline use over a number of years.

BT said it “intends to vigorously defend itself against the claim of excessive pricing”.

Landline overcharging claim

The class action claim launched in the Competition Appeal Tribunal by law firm Mishcon de Reya and Justin Le Patourel, founder of Collective Action on Landlines (CALL), relates to communication regulator Ofcom’s review of landline-only pricing in 2017.

It found elderly and vulnerable landline-only customers, of which BT had a monopoly, had been getting “poor value for money” compared to those who buy bundles, made up of landline, broadband and/or pay TV services.

As such, BT agreed to reduce its monthly line rental price by £7, meaning that standalone landline customers who paid £18.99 a month would pay £11.99 from April 2018 for three years, taking bills back to 2009 levels.

In December 2020, BT extended the voluntary price agreement for a further five years, with current landline-only customers paying just over £12 a month for the service.

However, Mishcon de Reya said this action seeks compensation for the historic overcharges and for individuals who were excluded from BT’s voluntary reduction.

‘Classic example of a loyalty penalty’

Partner, Rob Murray, who is representing Le Patourel, said: “The claims of customers directly harmed by BT’s exploitative behaviour are precisely the type of claims the collective actions regime is designed to deal with. We hope very much that a settlement can be reached to resolve them in line with BT’s acceptance of the need to avoid overcharging when investigated by Ofcom.”

Managing associate, Natasha Pearman, added: “This is a specialist claim that will be heard before the Competition Appeals Tribunal. It is a classic example of a loyalty penalty, which were the subject of a super complaint by Citizens Advice, due to their harmful effects on consumers. It will take time to gather evidence and bring it to trial, but we are very confident that eventually millions of BT’s most loyal customers will receive a significant rebate.”

‘We strongly disagree with the claim being brought against us’

A BT Spokesperson said the subject was considered three years ago and there was no finding of excessive pricing or breach of competition law more generally.

A spokesperson, said: “We take our responsibilities to older and more vulnerable customers very seriously and will defend ourselves against any claim that suggests otherwise.

“For many years we’ve offered discounted landline and broadband packages in what is a competitive market with competing options available, and we take pride in our work with elderly and vulnerable groups, as well as our work on the Customer Fairness agenda.

“We assure our customers, including the elderly and vulnerable, that we will not let this claim disrupt the relationship BT has with them particularly at this critical time, when our people have been working so hard to keep them connected with their loved ones.

“We will continue to offer a variety of packages to support our customers through the pandemic.”