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BT landline customers step closer to £600m compensation claim

Paloma Kubiak
Written By:
Paloma Kubiak

More than two million BT landline customers are a step closer to claiming a £500 compensation payment each relating to an allegation of ‘historic overcharging’.

The telecoms giant has been accused of anti-competitive behaviour towards landline-only customers, many of whom are elderly or from low-income households.

A class action claim was launched seeking compensation worth £600m for the 2.3 million customers potentially affected by the overcharging claims.

The latest Court of Appeal ruling has now clarified that a potential class action claim can proceed via an ‘opt-out’ basis, overturning BT’s call for an ‘opt-in’ basis.

BT said it “regrets being drawn into speculative litigation” and will “continue to vigorously defend itself against the speculative claim of overcharging”.

Landline ‘overcharge’ claim

This all related to the communication regulator – Ofcom’s – review of landline-only pricing in 2017.

It found that some elderly and vulnerable landline-only customers, of which BT had a monopoly – had been getting “poor value for money” compared to those on bundle deals made of landline, broadband and/or pay TV services.

In response, BT agreed to reduce its monthly line rental price from £18.99 to £11.99, from April 2018, taking bills back to 2009 levels.

In December 2020, BT extended the voluntary price agreement for a further five years. However, law firm Mishcon de Reya and Justin Le Patourel, founder of Collective Action on Landlines (CALL), launched a class action claim in the Competition Appeal Tribunal (CAT).

Under the UK’s competition regime, a person wishing to bring a class action on behalf of class members must first secure approval from the CAT.

They claimed compensation should be paid for the ‘historic overcharging’ and for the individuals excluded from BTs voluntary reduction.

In September 2021, the CAT issued a judgment approving the bid to launch the £600m class action claim against BT.

But BT appealed this judgment on the basis that the proceedings should be ‘opt-in’, meaning that the potential pool of 2.3 million members would need to be contacted and signed up to the claim before it could proceed.

However, the latest hearing saw the Court of Appeal dismiss BT’s appeal after considering Le Patourel’s dispute that anyone wanting to join the claim would have had to take active steps to become members, and would likely lead to low levels of engagement with such a process, as well as the cost and time of signing each person up to the claim.

As such, a class action claim has now been permitted to be brought on an ‘opt-out’ basis, so eligible members are now automatically included in the claim, unless they choose to opt out.

If the class representative is successful, the up to 2.3 million members would be entitled to compensation.

Le Patourel said: “I am grateful that the Court of Appeal has found in our favour and we can now proceed to a full trial. Asking people to sign up to legal process which they don’t understand, and which has an uncertain outcome, would almost certainly have led to low levels of engagement.

“This would have made it impossible to secure redress for those affected. Our case, that BT overcharged landline customers, many of whom were elderly and vulnerable, over the course of several years, is very strong. I look forward to progressing this claim as quickly as possible.”

‘We take our responsibilities to customers very seriously’

BT said at the time of Ofcom’s review, it did not find excessive pricing or a breach of competition law. It said the claim “seeks to hold against BT the fact that it implemented a voluntary commitment to reduce prices for landline-only customers”.

It added that it takes its responsibilities to customers very seriously, and that since 2008, it has offered a low income social tariff, launching BT Home Essentials last year to “futureproof connectivity at a time when online resources have never been more important”. It offers priority fault repair, and free texts, data and minutes for those in need amid the pandemic.

A BT spokesperson, said: “We strongly disagree with the speculative claim being brought against us. We take our responsibilities to customers very seriously and will defend ourselves against any claim that suggests otherwise.

“We take pride in our work on the Customer Fairness agenda. For many years we’ve offered a discounted social tariff in what is a competitive market with competing options available, and, last year we extended that to help a potential four million households on low incomes save on bills and stay connected to vital services now available to access online, on the phone or via our nationwide retail stores.

“We assure our customers that we will not let this claim disrupt the relationship BT has with them.”