In an investigation, Ofcom, the communications regulator, has revealed that GiffGaff has overcharged some of its mobile phone customers by a total of £2.9 million over an eight-year period, between May 2011 and February 2019.
Because of this, the regulator has fined the company, which is owned by Telefonica and has around 2.5 million customers, £1.4 million for the billing error. Ofgem said that the fine had been reduced from the original £2 million because GiffGaff agreed to settle the case.
However, in a statement, Ofcom said that the mistake was “unacceptable”, and it also gave GiffGaff an additional £50,000 fine for failing to provide accurate information in the investigation.
The error in billing was caused by a delay in GiffGaff applying prepaid bundles – also known as “goodybags”, which include minutes, texts, and data – to customers’ accounts after they had paid for them.
Ofgem said that, because they were then using the credit instead, they were effectively charged twice. The services should have been free immediately, but because there was a delay in the bundles being applied, the customers’ were overcharged.
“Getting bills right is a basic duty for every phone company. But Giffgaff made unacceptable mistakes, leaving millions of customers out of pocket. This fine should serve as a warning to all communications providers: if they get bills wrong, we will step in to protect customers.” Gaucho Rasmussen, the director of investigations and enforcement at Ofcom, said.
GiffGaff has refunded around £2.1 million to its customers. In addition, it has made a charity donation of £750,000, for the customers that it is unable to trace.
Ashley Schofield, the chief executive of Giffgaff said: “On behalf of everyone at Giffgaff, I’d like to apologise again to all those members affected by this and thank you for your ongoing support. As a business, we have already begun – and will be fully – implementing the recommendations within Ofcom’s final decision.”