Ofcom makes Tiscali and TalkTalk cough up £2.5 million

UK TELECOMS WATCHDOG Ofcom has forced the Internet service providers (ISPs) Talktalk and Tiscali into paying back £2.5 million they were found to have overcharged customers following an investigation.

The firms were investigated for incorrectly billing customers for cancelled services, which is good business for them, but bad form when viewed under the scrutiny of regulators.

Ofcom started looking into the overcharges in July of last year after its letterbox got stuffed with complaints from some 1,000 disgruntled ISP customers.

Having looked into these complaints, Ofcom issued the firms with a legal obligation to stop billing customers for services that had not been provided and told them to remedy current complaints by issuing refunds.

Those refunds have now been issued and, according to Ofcom, add up to a massive £2.5 million. However, the regulator is unable to impose any additional fines on the offending ISPs.

"TalkTalk and Tiscali UK have taken significant steps to fix the problem and to comply with the regulations by the deadline set, in direct response to Ofcom's action," it said in a statement.

"These steps include identifying and compensating some 62,000 affected consumers. On this basis, Ofcom is not in a position at present to impose a financial penalty on the companies under our current legal powers."

This might change however, as Ofcom wants to sharpen its teeth and reported that the government is consulting on changes to current laws that would let it issue the sort of fines that it wants, "regardless of whether a company subsequently took action to address the problem".

Ofcom might be keen to speed this up, as the ISPs are still generating complaints for its inbox. It added that it was still looking into their behaviour.

It warned, "If the investigation reveals that TalkTalk or Tiscali UK have continued to breach the regulations, they could still face further enforcement action including a financial penalty." µ