Vodafone fined £4.6m after PAYG top-up fails

Vodafone has been slapped with a hefty £4.6 million fine after failing to process customer top-ups. UK regulator Ofcom found that 10,452 pay-as-you-go (PAYG) customers weren't given a combined £150,000 in credit between December 2013 and April 2015. The affected users were relying on "E Top-Up" methods, including cash machines, direct debit, and E Top-Up swipe cards. According to Ofcom, the embarrassing snafu occurred after Vodafone changed its internal billing systems in 2010. The company "failed to act quickly enough" to address the problems and only stopped "customers from paying money for nothing" after Ofcom intervened.

Vodafone has been fined £3.7 million for its actions (or lack thereof). In a second, separate investigation, Ofcom has criticised the network operator for its customer service policies. According to the regulator, staff weren't given the proper training or information to correctly identify complaints. The company's practices were also "insufficient" to deal with and escalate complaints "in a fair, timely manner." In particular, Vodafone was penalised for not telling customers about their right to take complaints to a third-party resolution scheme after eight weeks. Ofcom has settled on a £925,000 fine for these failings, bringing its total bill to £4.6 million.

Vodafone has offered its "profound apologies" to customers, saying it "deeply regrets" the system and process failures uncovered by Ofcom. The migration that caused the billing errors was "complex," the company argues, spanning seven legacy systems and a new, modern replacement. "At various points a small proportion of customer accounts were incorrectly migrated, leading to mistakes in the customer billing data and price plan records stored on the new system," a spokesperson said. "Those errors led to a range of problems for the customers affected which - in turn - led to a sharp increase in the volume of customer complaints."

"Vodafone's failings were serious and unacceptable, and these fines send a clear warning to all telecoms companies," Lindsey Fussell, consumer group director for Ofcom said. "Phone services are a vital part of people's lives, and we expect all customers to be treated fairly and in good faith. We will not hesitate to investigate and fine those who break the rules." Vodafone has 20 days to pay the fine to the Treasury. The company has admitted its shortcomings, reimbursed customers and made a £100,000 donation to charity. Here's hoping the fees, along with the resulting embarrassment, deter Vodafone (and other carriers) from repeating these mistakes.