The regulatory equivalent of a thoughtcrime.

In reading the latest enforcement decision by the UK telecommunications regulator, Ofcom, you would be forgiven for thinking that the isolation caused by COVID-19 pandemic had caused some sort of fervour turning the market into an Orwellian dystopia.  

The decision relates to BT (or specifically BT’s subsidiary, EE, the largest mobile network operator in the UK), overcharging customers for calls to directory enquiry numbers (118 numbers) for 3 months in 2019. By way of background, Ofcom implemented price caps for 118 services effective 1st April 2019 in a previous statement

Ofcom reached a conclusion to impose the caps on the merits, exercising its discretion as an expert consumer protection and competition authority. There are good arguments on both sides, but that decision is not the issue. 

The reason Ofcom may legitimately be characterised as the “Thought Police” is that they have taken specific exception to billing errors that were corrected prior to bills being submitted. §2.5 of the Decision sums up the issue nicely. 

In total, BT overcharged 5923 EE customers by £42,709 for calls to 118 numbers, as a result of these billing errors. Of this £10,639 was paid by EE’s customers and has been refunded. The remaining sum was not billed to customers, as EE amended the customer bills before they were issued.

EE is a repeat offender in terms of enforcement action (indeed, Ofcom refer to EE as having “one of the worse compliance records of any [Communications Provider]”) and Ofcom have outlined why it considers a deterrence as a relative factor in levying the £245,000 fine. 

BT did not exactly do themselves any favours in this case either. Ofcom found BT’s regulatory team to have ineffectively communicated with the EE operational team and BT had given several (seemingly spurious) assurances to Ofcom prior to the implementation deadline that the required changes would be made.

Additionally, there are aspects of the market for calls to directory enquiries that can have a disproportionate impact on the more vulnerable in society. Altogether then, it is unsurprising that Ofcom descended upon BT like a tonne of bricks. However, the seriousness is not materially impacted by whether or not BT might have actually charged £42,709 to its customers or only the £10,639 they were actually charged. 

A mediated call data record that is sat awaiting a billing run to generate an invoice is at best an intent to charge that amount; it isn’t actually a charge until it is levied on the customer and it certainly isn’t an enforceable charge if it is in breach of regulation. 

Further into the Decision, we see Ofcom doubling down on the unbilled call being a “charge” at §4.9-4.10;

The total amount overcharged by EE in relation to calls to 118 numbers made during this period was £36,809.03. However, only 471 customers who called a non-compliant DQ number during the period 1 to 11 April 2019 made a payment as a result of the overcharging by EE. The total amount paid by these customers was £4,739.15. The remaining £32,069.88, relating to 3196 customers, was proactively recredited by EE to the customers affected before bills were issued to them

If your waiter spots an error on your restaurant bill and corrects it before handing it to you, has the hostelry in question committed an offence? If the cashier at a supermarket double scans an item by mistake and then corrects it before giving you the total, should they be sanctioned?

Granted, in consumer post-pay scenarios, there can be harm from unbilled call data records, i.e. in relation to a credit limit, entries on customer-facing portals and bars that may be erroneously applied, but that is the limit of the potential harm – and notably, it is a harm that is not discussed in the Decision. Equally, Ofcom may have concluded that these bills would have been issued had it not been for their intervention, but that is not discussed either. 

Thankfully, Ofcom differentiate between overcharge and overpayment later in the Decision when discussing severity of harm, but that’s not the point. This is a very worrying precedent; the unbilled call data records that were corrected prior to invoice are not merely referred to as some interested background information for context, they appear to form part of the logic for the sanction for “overcharging”.  

All providers should be concerned that an error in mediation that is rectified prior to the issuing of a bill may be construed as an illicit activity by the regulator. Processes and procedures should be reviewed in light of this and amended where appropriate. As ever, if anything in this piece affects you, do feel free to reach out for a no-obligation chat. 

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