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BT fined £2.8m over EE and Plusnet contract failures

BT fined £2.8m over EE and Plusnet contract failures
Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
22/05/2024
Updated:
22/05/2024

BT has been fined £2.8m after failing to provide more than a million customers with clear and simple information before taking out a contract.

The telecoms giant was found to have broken industry regulator Ofcom’s consumer protection rules which ensure customers receive clear and comparable information about services before signing up.

Since 17 June 2022, phone and broadband companies must give details of a contract, as well as a short summary of key terms before customers go ahead with a new deal.

This must include the price and length of the contract, the speed of the service and any early exit fees.

However, Ofcom revealed that BT failed to provide this information to at least 1.1 million customers of its subsidiaries EE and Plusnet, after it made more than 1.3 million sales since that date.

‘Saving costs’

The investigation came after Ofcom received information which suggested it may have failed to provide these documents to some customers.

The regulator said it engaged with providers before the new rules came in, and was told by BT in February 2022 that it was confident the deadline would be met.

However, Ofcom said its evidence suggested that BT was aware “from as early as January 2022” that some of its sales channels would not meet the new contract rule deadline.

Ofcom said: “Other providers dedicated the resource required to meet the implementation deadline for these new rules, and BT is likely to have saved costs by not doing so.”

BT contacted the 1.1 million customers between 26 June and 30 September 2023 explaining the issue, and they were given the chance to request the information or cancel their contract without a penalty.

However, Ofcom said that before BT had a chance to do this, some customers left mid-contract and may have been charged an early exit fee.

“Our rules are clear that if the required contract summary and contract information is not given, the contract is not binding on customers. As a result, an early exit fee should not have been payable by these customers,” Ofcom noted.

It added: “Also, some sales channels are still non-compliant and BT is still not providing the required information at the right time to some customers.”

‘Seriousness of breach’

As a result of these failures, the regulator has decided to fine BT £2.8m, which reflects the seriousness of this breach. However, it includes a 30% discount as a result of BT’s “admission of liability and agreement to settle the case”.

As well as fining BT, it also requires it to:

  • Identify and refund any affected customers who may have been charged for leaving before the end of their contract period, within five months of this decision;
  • Within three months, contact the remaining affected customers who are still with BT and have not already been contacted, to offer them their contract information and/or the right to cancel their contract without charge; and
  • Amend remaining sales processes that are still non-compliant to ensure all customers receive the right information at the right time, in most cases within three months of this decision.

 

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

“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.

“We won’t hesitate to step in on behalf of phone and broadband customers when our rules to protect them are broken.”

BT response

A BT spokesperson told YourMoney.com: “We’re sorry that some of our pre-contract information and contract summary documents were not available to some of our customers in a timely manner.

“We apologise for any inconvenience caused and have taken steps to proactively contact affected customers and arrange for them to receive the information and be refunded where applicable. We take compliance seriously at BT and we’re working closely with Ofcom to implement the remedial actions as a result of their findings.”