BT fined £2.8m for failing EE and Plusnet broadband customers

Ofcom, the industry regulator, has fined BT £2.8 million after an investigation concluded the provider had failed to follow clear and simple contract information rules.

It found at least 1.1 million EE and Plusnet customers had not received contract information and key terms before they signed up, including information on price, speed, and early exit fees.

BT has been instructed to pay the fine within four weeks, although Ofcom notes "BT's admission of liability and agreement to settle the case.".

Source: Ofcom

Contract rules

In June 2022, Ofcom bought in new rules for phone and broadband providers that said they must provide potential customers with certain contract details including a short summary of key terms before they sign up.

The information required included details on the price, length of the contract, the speed of the broadband service, and any termination fees for leaving the contract early. These rules fall under C1.3 to C1.7 of the General Conditions.

Ofcom says BT made 1.3 million sales, from at least 1.1 million customers, through their EE and Plusnet brands that contravened these rules in the five months after they came into effect, although some sales channels are still not compliant.

Customers affected were contacted by BT between June and September of 2023, when they were told they didn't receive the correct information about their contract and giving them the option to cancel their contract without penalty.

However, Ofcom say it's possible some customers could have already left their contract by this time and been charged early exit fees wrongly as their contracts weren't binding.

Remedial steps

In addition to paying a fine of £2.8 million, Ofcom is also requiring BT to identity and refund any customer who may have been charged an early exit fee on a contract taken out where the correct information wasn't given.

Any affected customers still with BT must also be contacted and given both the correct information for their contract as well as the option to leave early without penalty.

Lastly, BT has been given three months to ensure any remaining sales channels are bought into compliance and that all new customers are given clear and simple contract information before they sign up. Sales made via third party retail stores that are still non-compliant must also be remedied within five months.

It's worth noting that BT has already admitted liability and are already trying to remedy the situation as well as work with Ofcom on the issue.

Investigation

Ofcom's investigation, which began in January 2023, found BT was aware from as early as January 2022 that some of its sales channels wouldn't meet the deadline and in some cases BT deliberately chose not to comply with the rules on time.

BT admitted as early as 2022 that it had failed to provide the required information to customers signing up for broadband services through its EE and Plusnet brands.

Sales affected included those made through the EE website and app, EE retail stores, and also through the Plusnet website and telesales contact centre, as well as other consumer and business sales channels.

Indeed, Ofcom initially began investigating EE in October 2022, with this investigation later merged into the wider BT investigation in January 2023. The regulator subsequently received information that gave it "reason to suspect that Plusnet may also have failed to comply with these requirements".

Ofcom say the £2.8 million fine, while including a discount of 30% for BT's admission of liability, reflects that BT knew some of EE and Plusnet's sales channels wouldn't be compliant by the deadline and chose to take the risk of late implementation.

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.".