Today, Ofcom has announced that it will fine Vodafone £4.6m for serious and sustained breaches of consumer protection rules, its largest fine to date for a telecoms operator. This fine is intended to send a clear warning to others.
This fine stems from two earlier investigations into Vodafone, which commenced in June 2015.
One investigation found that 10,452 pay-as-you-go customers lost out when Vodafone failed to credit their accounts after they paid to ‘top-up’ their mobile phone credit. The affected customers collectively lost £150,000 over a 17-month period. The fine for these failings will be £3,700,000.
In a second investigation, Ofcom found that Vodafone failed to comply with its rules on handling customer complaints. The fine for these flaws in Vodafone’s complaints handling processes will be £925,000.
For both investigations, the fines arise from Vodafone’s contravention of Ofcom’s General Conditions, which are currently the main regulatory regime for communications networks and service providers in the UK.
Businesses in other sectors should note that Ofcom also considered taking action for possible breaches of the Consumer Protection from Unfair Trading Regulations 2008. These regulations ban UK traders in all sectors from using unfair commercial practices which prevent consumers from making free and properly informed buying decisions. Breaching these regulations is an offence with penalties ranging from a fine to up to two years’ imprisonment. As of 1 October 2015 B2C traders have also been required to comply with the Consumer Rights Act 2015, which we summarise here.