UK Reg Sees Vodafone Bill Errors, Takes No Action

Last week I wrote about Ofcom, the UK comms regulator, investigating EE for overcharging, and I noted that they had never issued any updates for a similar investigation that began eight months earlier, after Vodafone was accused of overbilling its customers. It seems I tempted fate, and an official update was issued later that day. So what did the UK regulator do to protect customers, after eight months of scratching their heads and staring at their navels? Nothing.

Following a thorough assessment of the evidence gathered from Vodafone, Ofcom has decided not to take any further enforcement action at this stage in this investigation in connection with Vodafone’s compliance with General Condition 11.1.

General Condition 11.1 is the rule that says British telcos are not allowed to overcharge, not even by a single penny. But what is really interesting is this choice of words: “not to take any further enforcement action”. The UK regulator must be confused, because investigation is not the same as enforcement, and this update implies that they spent eight months investigating, without any enforcement activity ever resulting from their investigation.

Did the regulator find evidence of overbilling? Surely, because the evidence can be found in the prolonged and severe levels of complaints by Vodafone customers. But Ofcom did not find enough of a problem to do anything. That only begs the question of how much is too much. Or rather, we must ask how much error is enough to prompt the UK regulator to actually do the things it says it does.

Not taking any action is an ideal outcome for this regulator, given that it scrapped the thresholds for tolerable billing error, so nobody has a clue about how many errors would lead to non-compliance with the rules. The old tolerances only permitted an overcharge of £1 per every £50,000 billed, but Ofcom said they removed those objective, numerical tolerances to force telcos to be even more accurate. Now we are totally unable to gauge what degree of error was found, when Ofcom states the following.

In reaching this decision, and notwithstanding certain billing issues having been identified, we have taken into account the following factors:

  • that Vodafone had established processes and procedures in place to actively monitor billing issues, when they occur, and to fix them in a timely manner, including taking appropriate remedial action, where necessary; and
  • that, based on our assessment of the number of customers affected, Vodafone’s processes for correcting errors through amending subsequent bills and the monetary value being taken from the customer’s account, the level of harm actually incurred by customers appears to have been relatively low.

So let us clarify what the regulator is really saying here. Vodafone has ‘processes and procedures’ to identify overcharging, and to take ‘remedial action’ when a mistake is identified. That means that Vodafone waits for customers to complain, then issues them a credit. And what is the regulator’s vague estimate of the harm that was done to all the customers who have complained to Vodafone since their billing fiasco began in late 2014? What damage was done to record numbers of customers who checked their bills, complained, and had to wait for a credit on their next bill? According to Ofcom, the degree of harm was “relatively low”. I recommend that nobody ever asks Ofcom about the length of a piece of string, as they might spend eight months conducting an investigation, only to conclude the string’s length is what it is.

Complaints went through the roof at Vodafone over a year-long period, and all the UK regulator could do is to promise they…

… will continue to monitor complaints against Vodafone in regard to billing issues and we will not hesitate to open a new investigation should we consider there are sufficient grounds to believe that Vodafone is failing to comply with GC11.1.

Vodafone has been receiving more than double the number of complaints endured by any other UK mobile provider, and a disproportionate number of Vodafone complaints relate to billing. That makes me wonder: how many complaints must a telco receive from customers, before the UK regulator’s proactive approach leads them to do something additional to the things that customers already do to protect themselves? And what does it mean to talk about ‘sufficient grounds to believe’ there is a failure to comply with GC11.1, when that condition is worded to imply it prohibits even a single penny of overcharging? And why scrap the tolerances for error, but then tell the world that errors are “relatively low”? The word “relative” is rendered meaningless, because nobody in the public has any standard that could be used for comparison. I believe that was the real motive for scrapping the publicly-stated tolerances, which have clearly been replaced by expectations that are known to Ofcom, and possibly to some telcos, but are kept secret from the public.

In short, UK customers are ‘protected’ by a regulator which is both a busybody with vague and open-ended powers, and also a laggard that waits until customers complain before it takes any notice of the harm that customers are suffering. And even when the regulator does pay attention, its conclusion is that telcos only need to ensure accurate billing by waiting to see if they receive complaints, then listening to those complaints, and responding to them. But if all telcos need to do is to appropriately handle complaints, what is the purpose of a sector-specific bill accuracy regulation like GC11.1? Every business receives complaints, and you do not need special rules to tell telcos they must take notice of the complaints they receive!

I feel sorry for Vodafone customers. They can change telco, and if the results of Ofcom’s customer survey is to be believed, then many of them are considering that option. But they cannot change the UK’s do-nothing regulator, which wastes money telling customers it has protected them by ‘thoroughly’ investigating a situation where customers already protected themselves. Stories about billing errors and bill shocks are routine in the British media. Customers are advised to complain to their telco, or to complain to the British press, but Britain’s regulator will never take action until the public, or the press, forces them to.

Eric Priezkalns
Eric Priezkalns
Eric is a recognized expert on communications risk and assurance. He was Director of Risk Management for Qatar Telecom and has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and others.

Eric was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He was a founding member of Qatar's National Committee for Internet Safety and the first leader of the TM Forum's Enterprise Risk Management team. Eric currently sits on the committee of the Risk & Assurance Group, and is an editorial advisor to Black Swan. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.

Commsrisk is edited by Eric. Look here for more about Eric's history as editor.