UK's TalkTalk Faces Huge Fine For Not Fixing Billing System
Sends debt collectors after customers who didn't receive any service
In May 2009, UK residential broadband provider TalkTalk bought Internet service provider Tiscali's UK business for £236 million. This made TalkTalk, a subsidiary of Carphone Warehouse (Europe's largest independent mobile phone retailer), the largest residential broadband provider in the UK with over 4.25 million subscribers - about 25% of the UK market.
At the time of the acquisition, Carphone Warehouse CEO Charles Dunstone said he was happy about the acquisition, and was quoted in a ComputerWeeklystory as saying: "We know it well and the fit with TalkTalk is perfect."
CEO Dunstone may be rethinking that statement today.
According to various UK news reports like this one in the London Telegraph, TalkTalk is facing a fine of up to £139 million for sending out what the Telegraph says are bogus bills.
The UK communications regulator Ofcom says in its press release that it told "TalkTalk and Tiscali UK to stop breaching telecom rules or they could face further enforcement action, including a possible financial penalty." The companies have until 02 December to comply or face further action. Ofcom also told the company to cease using collection agencies or taking legal action against its former and existing customers for nonexistent debts, and to pay their legal costs.
Ofcom says that it has received over 1,000 complaints so far this year alone from people being billed for services that they did not receive from TalkTalk.
Ofcom says in some cases, customers who had canceled their subscriptions were still being billed two or more years later. When they didn't pay, their bills were sent to collection agencies.
According to the Telegraph, TalkTalk blamed the problem on a "legacy billing" error at Tiscali. However, this BBCarticle says the company blamed it on a new billing system it introduced after buying Tiscali.
Either way, TalkTalk also said the problem wouldn't be fixed until the end of the year.
Robert N. Charette is a Contributing Editor to IEEE Spectrum and an acknowledged international authority on information technology and systems risk management. A self-described “risk ecologist,” he is interested in the intersections of business, political, technological, and societal risks. Charette is an award-winning author of multiple books and numerous articles on the subjects of risk management, project and program management, innovation, and entrepreneurship. A Life Senior Member of the IEEE, Charette was a recipient of the IEEE Computer Society’s Golden Core Award in 2008.