BT-owned Plusnet has been fined a whopping £880,000 for continuing to bill over a thousand customers who had cancelled their accounts with the company.
Ofcom issued the sizeable fine after an investigation found that a total of 1,025 customers had been billed £530,775 due to a fault in the companies billing systems that failed to correctly update to reflect a customer had left the company.
As a result, many were billed despite having already moved to other broadband a landline phone providers.
Plusnet did attempt to reimburse those affected, with 356 contacted so far and a total of £212,140 repaid, which includes a four per cent interest increase for all repaid to represent how long it has taken to rectify the issue.
Attempts to contact others have been unsuccessful, so the company has given the remaining money to 12 charities.
Despite all this Ofcom's Consumer Group Director Lindsey Fussell said a hefty fine was required to underline the seriousness of the issue.
"There can be no margin for error, and no excuses, when it comes to billing customers correctly," she said.
"This fine should serve as a reminder to telecoms companies that they must adhere to Ofcom's billing rules at all times, or face the consequences."
It would have been over a million pounds but because Plusnet owned up to the issue and entered into a formal agreement, it received a 20 per cent discount.
V3 contacted Plusnet for comment on the fine but had received no reply at the time of publication.
Richard Neudegg, head of regulation at price comparison site uSwitch.com said customers with Plusnet between May 2011 and September 2015 should make sure they investigate if they are due a refund.
"If you are a former Plusnet customer and think you might have been impacted, complain to Plusnet directly - you might be due a refund. If you're unhappy with the response, you can escalate it to the relevant free dispute resolution service, which for Plusnet is CISAS."
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