Vodafone fined £4.6m for poor customer service 

Ofcom on Wednesday fined Vodafone UK £4.6 million (€5.1 million) for problems experienced by prepaid customers that were caused by Vodafone's bungled migration to a new billing system.

The telco regulator carried out two investigations. The first found that Vodafone failed to credit the accounts of more than 10,000 prepaid customers, causing said customers to collectively lose £150,000 over a 17-month period.

Vodafone also failed to act quickly enough to identify and solve the problem, Ofcom said. Whether by coincidence or otherwise, effective measures to address the issue and reimburse affected customers were only taken after the watchdog intervened.

Ofcom's second investigation found Vodafone's complaint-handling procedures left a lot to be desired.

According to the regulator, Vodafone did not adequately ensure that all complaints were appropriately escalated or dealt with in a fair, timely manner. Furthermore, Vodafone did not ensure that all customers were informed, in writing, of their right to take unresolved complaints to a third-party resolution scheme after eight weeks.

As a result, Vodafone was fined £3.7 million for failing to credit the accounts of affected prepaid customers, and £925,000 for flaws in its complaints-handling processes.

The penalties would have been steeper had Vodafone not admitted to its failings.

"Vodafone's failings were serious and unacceptable, and these fines send a clear warning to all telecoms companies," said Lindsey Fussell, Ofcom's consumer group director.

"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," she said.

Vodafone apologised for the issues and insisted that the problems with its billing system are now firmly behind it.

"We offer our profound apologies to anyone affected by these errors," said a statement from the company.

"Everyone who works for us is expected to do their utmost to meet our customers' needs, day after day, and act quickly and efficiently if something goes wrong. It is clear from Ofcom's findings that we did not do that often enough or well enough on a number of occasions."

Vodafone explained that errors were caused during the migration of 28.5 million customer accounts to a new billing system from seven legacy billing systems. During the migration, some accounts were not transferred correctly, leading to mistakes regarding billing data and price plan records.

The error investigated by Ofcom affected prepaid customers who had not topped up their credit for nine months or longer, explained Vodafone.

"Unfortunately, as the circumstances of the IT failure in question were very unusual, the teams responsible for the day-to-day operation of the relevant areas were not fast enough in identifying the issue and did not fully appreciate its significance once they did so," Vodafone said.

"The IT failure involved was resolved by April 2015 – approximately 11 weeks after senior managers were finally alerted to it – with a system-wide change implemented in October 2015 that – as Ofcom acknowledges – means this error cannot be repeated in future," the telco added.

Vodafone said it has contacted and refunded all but 30 affected customers. It has made charitable donations totalling £100,000 in lieu of refunding those customers it has not been able to track down.

Since the new billing and customer management system was fully implemented, customer complaints have fallen by 50%, the company added.

Vodafone has also invested in improving customer service, hiring an additional 1,000 call centre staff and providing further training to improve how it identifies and resolves problems.

"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. We are also confident that our customers are already beginning to see the benefits of our substantial investment in new systems designed to meet their needs much more effectively in future," Vodafone said.

Source: Total Telecom