£600m Lawsuit Over Overcharging Customers To Be Filed Against BT

A law suit is slated to be filed against British telecom (BT) over charges that the telecom company did not adequately compensate its elderly customers even after overcharging them fpr their landlines for years.

Those BT customers who only had a landline telephone were “getting poor value for money in a market that is not serving them well enough”, Ofcom had said in 2017.

That forced BT to reduce its charges on landlines by £7 a month.

However the company had still not compensated the “loyal customers” for being over charged for a long period of time which irked campaigners.

“Ofcom made it very clear that BT had spent years overcharging landline customers, but did not order it to repay the money it made from this,” said Justin Le Patourel, founder of consumer group Collective Action on Landlines (CALL) and a telecoms consultant who worked for Ofcom for 13 years.

“We think millions of BT’s most loyal landline customers could be entitled to compensation of up to £500 each, and the filing of this claim starts that process.”

While strongly disagreeing with the allegations against it of anti-competitive behaviour, BT said that it would defend itself  from the charges “vigorously” in court.

“We take our responsibilities to older and more vulnerable customers very seriously and will defend ourselves against any claim that suggests otherwise. For many years we’ve offered discounted landline and broadband packages in what is a competitive market with competing options available, and we take pride in our work with elderly and vulnerable groups, as well as our work on the Customer Fairness agenda,” said a spokesman for BT.

A claim with the Competition Appeal Tribunal (CAT) worth £600m has been filed by the law firm Mishcon de Reya. If the claim is successful, it could result in a payout of £500 each for 2.3 million BT customers.

The case is related to those customers of BT who had purchased a BT landline but had not purchased the company’s broadband or pay TV packages.

There has been a drop of at least 25 per cent in the wholesale costs of providing landlines to consumers since 2009. However, the line rental charges had been increased by between 28 and 41 per cent by all major landline providers in the United Kingdom, Ofcom found in October of 2017.

The UK market leader BT was strongly criticised by Ofcom for raising prices and had said “poor value” for money was being given to the customers by the company.

Many of the customers who had been affected by the business policy of BT had “been with BT for decades” and most likely were old, with low incomes and quite vulnerable.  

It would slash its landline prices by £84 a year, BT announced.

There was no accusation levelled explicitly of BT being engaged in anti-competitive behaviour in the final statement of Ofcom, BT argued.

The telecoms giant “has a history of abusing its position”, independent telecoms analyst Ian Grant says.

“Earlier in 2017, Ofcom fined BT £42m because it was late providing high-speed Ethernet lines, and forced BT to make good the losses of firms like Vodafone and TalkTalk,” he said.

“Ofcom, which has a statutory duty to stop consumer abuses, could have done the same for these customers. Instead, it allowed BT to get away with a 37% price cut, at a time when the difference between its costs and what it charged customers had risen between 50-74%.”

(Adapted from BBC.com)

Categories: Creativity, Regulations & Legal, Strategy, Sustainability, Uncategorized

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