EE Overcharged Customer Service Calls

Ofcom, the UK comms regulator, has announced it will investigate EE, the UK’s largest mobile operator, after EE admitted it ‘may’ have overcharged some customers calling its 150 customer service line between July 2014 and July 2015.

The wording of the official announcement is tedious and coy. Anybody who can read a newspaper knows that every UK telco overbills customers from time to time, as evidenced by stories about bill shock and the subsequent admission of mistakes by comms providers. Ofcom does not investigate every single billing error by every single telco; independent auditors are employed to supposedly check that bills are correct. Nor is Ofcom willing or able to comment on the startling year-long rise in complaints about Vodafone bills, even though the regulator’s consumer survey confirms the significance of the problem. So why is the UK regulator announcing that its ‘monitoring and enforcement programme’ now needs to pay special attention to mistakes made by Vodafone’s rival EE, even though they were seemingly resolved over 6 months ago?

The UK’s metering and billing accuracy regime lacks credibility, and the regulator’s haphazard interventions only succeed in drawing attention to that fact. It makes no sense to suggest that Ofcom can usefully protect customers by starting an investigation of a mistake half a year after it has ended, and which only came to light “following consideration of information provided by EE in response to Ofcom’s enquiries”. It is even more bizarre that the regulator only dares to say that some customers may have been charged too much between the very specific dates of 1st July 2014 and 20th July 2015. Are they incapable of finding one genuine example of a customer who was overbilled? How much investigation would it take to do that? Obviously some people were charged the wrong amount, but the regulator is too slow at gathering relevant data, and does not understand how to effectively respond to the information it does eventually collect. In short, you cannot protect customers by waiting at least 6 months before you start investigating if they were overcharged!

The very particular nature of the error being investigated further highlights Ofcom’s incompetence.

… Ofcom became aware of evidence that EE may have charged some customers US roaming rates when calling customer services using the “150” number from within the European Economic Area (EEA)…

So presumably there was a screw-up with the roaming rates applied for that very specific class of calls. But telcos are always making mistakes when applying uncommon rates to unusual categories of calls. These mistakes can go unnoticed for a long time because few calls are affected and very few customers are likely to notice the problem. Operational units are not conscious of the risks, testing does not focus on unlikely combinations of events, and call center staff may not be able to highlight and escalate what went wrong, even on those rare occasions where a customer is able to identify and articulate the actual problem.

The decision to investigate this particular mistake demonstrates that Ofcom does not comprehend how telcos really work, when it comes to the operational details that are pertinent to errors like this. If Ofcom needs to investigate this issue, then every year there must be twenty other billing issues which are just as severe, and which equally deserve their scrutiny. However, it is very unusual for Ofcom to open a specific investigation like this, and even when they do, we never seem to receive an update, never mind a proper conclusion.

Perhaps we can forgive regulators a little. The history of revenue assurance shows that most people struggle to understand why mistakes occur, and they tend to underestimate both the frequency and complexity of errors, unless they have spent several years being re-educated by a dedicated and successful RA function. However, Ofcom has less excuse than most regulators. Since the early 1990’s, Ofcom has supposedly received intelligence from an audit program which it has imposed on UK telcos, and which claims to have ‘continuously improved’ the accuracy of UK bills. If Ofcom thinks the error described above deserves special attention, then the intelligence received from decades of auditing must have been so incomplete and pathetic, so arbitrary and ramshackle, that the regulator must have no sense of perspective whatsoever. I have seen a UK telco charge some calls at 100 times the rate they should have, simply because of an error in the placing of a decimal point. Where was Ofcom then, and do they now propose to investigate every similar mistake?

When considering this old-fashioned mistake, we should keep in mind how the communications sector is transforming itself. Competition regulators recently approved the GBP12.5bn (USD18.1bn) acquisition of EE by BT, the UK incumbent fixed-line operator. The combined firm will have 35 million customers, and will possess a greater than 30 percent share of UK’s fixed line voice, fixed broadband and mobile markets. By linking the only UK-wide high speed broadband network to the only UK-wide 4G network, the comms business will be able to lever BT’s strategic investment in supplying exclusive television content over the internet. BT is also rumored to be a potential bidder for Channel 4, one of the UK’s established terrestrial TV channels.

Business models are changing before our eyes, but regulators show themselves unable to comprehend the implications. Ofcom’s understanding of bill accuracy is virtually prehistoric, even though this unified regulator was created in order to anticipate developments in communications and technology. If a provider charges a flat fee for a pay-per-view event that is streamed over the internet, and the service is interrupted at the end, so I miss the final minute of a two-hour show, will Ofcom be investigating the reasons I was overcharged? No, because they still think billing accuracy only relates to old-fashioned usage charges. And they lack any sense of the frequency of errors, or their potential magnitude when they occur. That is why they will investigate this mistake by EE, and why they will fail to investigate dozens of other mistakes that will cause just as much harm to customers. Once again, the golden rule for customer protection is plain: customers had better protect themselves, because the regulators are not competent to do so.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.