Giffgaff has been given 20 working days to pay the fine
Giffgaff has been hit with a fine of £1.4 million by Ofcom after overcharging around 2.6 million customers.
The fine was issued today (July 30) after the industry watchdog ran an investigation on the MVNO that is owned by Telefónica UK and uses the O2 network.
The investigation found an error in the billing system that has seen customers overcharged up to £2.9 million.
Ofcom director of investigations and enforcement Gaucho Rasmussen has called the situation unacceptable.
“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 the bills wrong, we’ll step into protect customers.”
Giffgaff has already refunded £2.1 million to affected customers, and donated money to charity to those customers it hasn’t been able to trace.
The fine imposed on Giffgaff is 30 per cent less as the MVNO agreed to settle the case and admitted to the breach.
The problem arose when Giffgaff customers bought ‘goodybag’ bundles, which customers can pre-pay for bundles of voice minutes, text messages and data.
However in this instance customers were overcharged while using their pre-paid credit after there was a delay in Giffgaff applying the bundle purchase to their accounts.
This meant that any calls customers were using or data usage being used at the time was coming out of customers pre-paid credit instead.
Giffgaff has been given 20 working days to pay the fine, which will be passed on to HM Treasury and will also have to pay an additional £50,000 for failing to provide accurate information to two statutory information requests issued by Ofcom during the investigation.
uSwitch mobiles expert Ernest Doku has called the error from Giffgaff disappointing.
“Giffgaff deserves credit for reporting the mistake to industry watchdog Ofcom and acting quickly to refund 2.1 million customers. But the fact that almost half a million consumers are still out of pocket is disappointing.
“If you are a Giffgaff customer and believe you could have been overcharged, contact your provider as soon as possible.”
In a statement Giffgaff CEO Ash Schofield issued an apology to its customers and said ‘major steps’ has been taken to refund those customers affected.