TalkTalk and Tiscali UK pay out £2.5m in refunds

TalkTalk and Tiscali UK have been forced to pay out almost £2.5m in refunds and good will payments after an Ofcom investigation found that the companies had erroneously billed customers for cancelled services.

The two firms, which belong to the TalkTalk Group, had issued bills for services consumers had cancelled, leading to over 1,000 complaints to the regulator.

TalkTalk and Tiscali have now taken "significant steps" to fix the problem, including identifying and compensating the 62,000 affected customers, and will not face further fines, Ofcom said.

However, Ofcom hinted that if proposed changes in the law come into effect on 25 May, the regulator would be able to fine organisations like TalkTalk for breaches of its regulations "regardless of whether a company subsequently took action to address the problem".

"Despite the actions taken by TalkTalk and Tiscali UK, Ofcom is still receiving some complaints from consumers," said Ofcom.

"In light of these and information obtained from the companies, Ofcom will continue its investigation into their compliance with the regulations."

The watchdog added that if the investigation reveals that TalkTalk or Tiscali UK have continued to breach the regulations, they could face a financial penalty.