EE fined £2.7 million for overcharging customers
EE have been fined £2.7 million by Ofcom, after the mobile operator overcharged 40,000 customers for roaming in the EU.
The fine stems from two separate but related violations. Firstly, EE had overcharged at least 32,145 customers phoning their "150" customer service number from within the EU, billing them as if they'd been calling from the United States.
Secondly, Ofcom found that, even though EE had made it free for customers to phone their "150" number from November 2015, they continued billing 7,674 customers for the privilege up until January 11th 2016.
Together, these costly blunders put customers £247,903 out of pocket, although EE have been able to refund the majority of them. It just remains to be seen whether having to make such a refund and to pay the Treasury nearly £3 million will motivate the operator to avoid making similar errors in the future.
General Conditions of Entitlement
In fact, the fine would have been £3 million, except that EE received a "10% reduction" for agreeing to cooperate and settle with Ofcom, who launched their investigation into EE in January 2016.
Soon after beginning this investigation, Ofcom found that EE had contravened the General Conditions of Entitlement between July 1st 2014 and July 20th 2015, and then again between November 18th 2015 and January 11th 2016.
The beginning of the first period - July 1st 2014 - coincides with the EU reducing roaming charges for travellers, as part of their plans to end them completely by June 2017.
However, EE's violation isn't directly related to this reduction. Instead, it arose from decisions taken in 2008, when EE instructed their third-party data clearing house to remove the UK international dialling code (+44) from the records of customer calls made to certain "short code" numbers.
This included EE's "150" customer service number. Because this number begins with a "1", EE's billing system was therefore made to think that people phoning the customer service line were calling the United States.
As a result, customers phoning for help while in the EU were charged £1.20 a minute, costing them £245,700 in total.
Carelessly or negligently
As bad as this mistake was, what makes it worse in Ofcom's eyes was that EE didn't take sufficient steps to identify or correct it.
For instance, Ofcom's investigation concluded that, in addition to giving their data clearing house instructions that led to the overcharging, EE didn't bother to "check [that] these instructions were implemented correctly".
Neither did they "test the tariff changes that produced the overcharging either beforehand or when it implemented them", a failing which also relates to the second instance of overbilling.
Finally, when they learned of the issue, EE didn't warn customers. This was mainly because they'd "wrongly decided" they couldn't identify the people affected and reimburse them, a conclusion helped by their failure to notify the company that approves their billing system.
And together, such actions were grounds for Ofcom to conclude that EE "acted carelessly or negligently".
'Lessons will be learned'
While such a conclusion shows that a £2.7 million fine is entirely justified, it's worrying insofar as it suggests the possibility that more violations by EE and other operators are likely, irrespective of how the mobile industry is regulated.
That's because, rather than simply being the result of a system flaw that has now been identified and rectified, it was fundamentally the result of carelessness and negligence, of EE being too complacent to watch itself closely.
And while the imposition of a fine might provide EE with motivation to be less careless in the future, the fact that they've been fined in the past for other failings suggests that this might not be the case.
For example, in July 2015 they were fined £1 million for "failing to follow rules on customer complaint handling", and while they've reduced the number of complaints they receive regarding their mobile service since then, they still receive a high level of complaints regarding their landline and broadband services.
Similarly, they admitted in October 2014 that they'd been overestimating the amount of data used by their customers, something that appears to have been repeated by the error they're being fined for today.
This therefore doesn't bode too well for their having a 100% squeaky-clean future, even though they've apologised "unreservedly" for the overcharging.
A spokesperson for them told us, "We have put measures in place to prevent this from happening again, and have contacted the majority of customers to apologise and provide a full refund".
They have in fact even donated £62,000 to charity in view of their failure to identify almost 7,000 affected customers. However, it's almost certain that such customers would much prefer to be reimbursed as well, and for similar overcharging to never happen again.