Mobile phone group GiffGaff fined £1.4m by industry watchdog after overcharging around 2.6m customers

The logo of mobile phone network GiffGaff displayed on the screen of a smartphone, as the mobile phone group has been fined £1.4 million by the industry watchdog for "unacceptable" billing mistakes after it overcharged around 2.6 million customers. PRESS ASSOCIATION Photo. Issue date: Tuesday July 30, 2019. Photo: Dominic Lipinski/PA Wire

Ofcom said Giffgaff - which is owned by O2 parent Telefonica - overcharged customers up to a total of almost £2.9 million over nearly eight years.

It found that Giffgaff had been overcharging customers who bought its pre-pay bundles of voice minutes, text messages and data - called “goodybags” - between May 2011 and February this year.

Delays in applying goodybag bundles to accounts meant that voice calls and data were wrongly initially taken from pre-paid credit, meaning customers were charged twice.

Giffgaff has already refunded around £2.1 million to affected customers, but in cases where it has been unable to trace customers due a refund, it has donated the money to charity.

Ofcom said the fine - which will be paid to the Treasury - was reduced by 30% after Giffgaff agreed to settle and had reported the mistakes to the regulator.

But Giffgaff was hit with an extra £50,000 penalty for failing to provide accurate information to two requests by Ofcom during its probe.

Gaucho Rasmussen, director of investigations and enforcement at Ofcom, said: “Getting bills right is a basic duty for every phone company.

“But Giffgaff made unacceptable mistakes, leaving millions of customers out of pocket.

“This fine should serve as a warning to all communications providers: if they get bills wrong, we’ll step in to protect customers.”