Vodafone UK was full of remorse after it was fined almost £5 million for “serious and sustained” breaches of consumer protection rules by the country's regulator.

Ofcom undertook two separate investigations in June 2015, one related to the operator's pay-as-you-go offering and one related to complaints handling, which both results in fines totalling £4.625 million.

The PAYG investigation, which covered the period between December 2013 and April 2015, found that Vodafone failed to credit 10,452 customer accounts after they had paid to top-up their accounts.

Ofcom said that, collectively, the customers lost £150,000 over a 17-month period.

For this breach, which was blamed on the transfer to a new billing system, Vodafone received a £3.7 million fine.

The second investigation found that the operator had failed to comply with Ofcom rules on handling customer complaints.

The regulator said that Vodafone’s customer service agents were not given “sufficiently clear” guidance on what constituted a complaint, while its processes were “insufficient to ensure that all complaints were appropriately escalated or dealt with in a fair, timely manner”.

For this, Vodafone received a £925,000 fine.

The operator has 20 working days to pay the fine, which was reduced by 7.5 percent after Vodafone agreed to enter into a formal settlement.

Lindsey Fussell, Ofcom Consumer Group Director, said: “Vodafone’s failings were serious and unacceptable, and these fines send a clear warning to all telecoms companies.

“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 said it “deeply regrets” what it described as “system and process failures”.

A statement read: “It is clear from Ofcom’s findings that we did not do that often enough or well enough on a number of occasions. We offer our profound apologies to anyone affected by these errors.”

The operator blamed the errors on “a complex IT migration” that involved moving more than 28.5 million customer accounts and almost one billion individual customer data fields from seven legacy billing and services platforms to one new system.

It said it accepted that the steps it took to remedy the situation between October 2014 and November 2015 were not “effective or sufficient”.

Vodafone has fully refunded or re-credited 10,422 customers out of the 10,452 affected.

It said the average refund per customer was £14.35.

Vodafone said it had been unable to track down the remaining 30 customers and that it had made a donation of £100,000 to a number of UK charities in lieu.

The company noted that the IT failures should have been identified and flagged to senior management for urgent resolution “much earlier”.

It said that “a system-wide change” implemented in October 2015 means the errors cannot be repeated in the future.

The operator said it had invested £30 million this year in customer service and training including hiring an additional 1,000 new UK-based call centre personnel.

Customer complaints since November 2015 have halved, it noted, while its Net Promoter Score has increased by 50 points.

It concluded: “This has been an unhappy episode for all of us at Vodafone: we know we let our customers down. We are determined to put everything right.”
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