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Vodafone UK Receives Huge Fine for Breaches of Consumer Protection Rules

On 26 October 2016, Vodafone was fined £4.6 million.  The reason for the fine? For failing to provide services for which customers had paid. Ofcom completed two investigations against the telecom giant. The end result of the investigation includes £3.7 million for breaches related to pay-as-you-go customers while an additional £925,000 was based on failures within the complaints handling process. At this time, Vodafone has 20 working days to comply. Ultimately, the money will be passed to the Treasury.

The findings showed that Vodafone, the second-largest mobile operator, took money from customers without providing services as agreed. At this time, Vodafone states they have reimbursed all identifiable pay-as-you-go customers who were incorrectly charged. An additional 30 customers could not be successfully identified.

The amount of the fine is only topped by a £5.7 million fine levied against ITV in 2008 relating to premium-rate phone lines in popular shows.

Original Cost to Vodafone Consumers

Ofcom found that over the course of a 17-month period ranging from late 2013 to early 2015, approximately 10,452 customers were not properly credited for funds added to their accounts. The total amount lost was calculated at £150,000. Further, Ofcom asserted that Vodafone failed to correct the issues until regulators involved themselves.

Since these were pay-as-you-go accounts, improper crediting left thousands of mobile users disconnected at various points during the aforementioned time period. That means the customers were not able to make or receive calls until their account received additional funds.

Full Implications

Most people consider their phone vital to their daily lives. Whether managing family obligations, looking for new employment opportunities, or coordinating a medical appointment, not having access to a working phone presents serious challenges.

While any person would have issues dealing with an unexpected outage, pay-as-you-go customers may be particularly vulnerable. Often, these phones are used by those with limited funds or without the credit necessary for regular service. That means a financially vulnerable portion of the population was disproportionately affected by the poor service they received.

To make matters worse, there is little someone can do when dealing with these situations. Aside from filing complaints with the company (which most of these customers did), there are limited immediate solutions. While those who could afford to add more money to their accounts may have been spared a long outage, not everyone has that capacity.

Living Disconnected

While many news outlets and blog sites have done stories on living without a smartphone for a period of time, they had other ways to connect with the people in their lives. Some had access to home or workplace internet or could use a tablet connected to Wi-Fi. Others maintained landlines. That means they were never fully disconnected. And, they were often performing an experiment, one which they could end whenever they deemed necessary.

However, if your cell phone is your sole lifeline, surviving without it isn’t easy. It’s even worse when you lose access because your carrier mishandled your credits. Imagine having no guaranteed access to phone calls, text messages, and emails. Or, at a minimum, having to rely on the good graces of friends, family, neighbours, or public services just to find out if you got a job.

With any luck, the significant fine charged to Vodafone will serve as a warning to others that taking advantage of consumers will not be tolerated, whether the act is intentional or incidental. Only time will tell. In the meantime, it might not hurt to keep a spare £20 stashed away.  That way, should you find yourself in a similar situation, you’re prepared.

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