Vodafone UK Billing Complaints Up Again

UK comms regulator Ofcom has published their complaints stats for Q4 2016, and Vodafone UK continues to top the tables for postpaid mobile providers. This is the ninth quarter in a row that Vodafone has generated levels of complaint that were previously unprecedented. As with previous quarters, the leading issue was ‘billing, pricing and charges’, which is Ofcom’s opaque way of saying Vodafone has an ongoing problem with overbilling customers following a botched billing migration.

Ofcom received 24 complaints per every 100,000 Vodafone customers. In contrast, its largest competitors, EE and O2, respectively generated 4 and 3 complaints per every 100,000 customers. The worst performers after Vodafone were Talk Mobile, TalkTalk and Virgin Mobile, with 9, 8 and 8 complaints per 100,000 customers. Once again, Vodafone is three times over the industry average, single-handedly lifting the average by several points to 7 complaints per 100,000 customers. The best performing telco was Tesco Mobile, which was reported to have less than 0.5 complaints per 100,000 customers.

The number of Vodafone complaints rose by a third compared to Q3, reversing a trend that would have seen Vodafone complaints reduce to ‘normal’ levels within a few quarters. However, Ofcom made the unusual move of rationalizing the increase in Vodafone complaints, adding a footnote which reads:

The increase in Vodafone complaints per 100,000 subscribers in Q4 2016 was affected by a spike in complaint numbers following the news, published in October 2016, that Ofcom had fined Vodafone for mis-selling, inaccurate billing and poor complaints handling procedures.

That begs a question. Why is Ofcom misrepresenting the punishment they gave to Vodafone? Here is the description of the fines issued by Ofcom in their own words, with my added emphasis:

One investigation found that 10,452 pay-as-you-go customers lost out when Vodafone failed to credit their accounts after they paid to ‘top-up’ their mobile phone credit…

Vodafone also breached Ofcom’s billing rules, because the top-ups that consumers had bought in good faith were not reflected in their credit balances.

In a second investigation, we found that Vodafone failed to comply with our rules on handling customer complaints.

Ofcom is trying to argue that a penalty they issued for prepaid mis-selling and charging errors is the explanation for a rise in the number of postpaid customers who found errors with their bills.

Contrary to the misleading footnote in their report, Ofcom has never issued any penalty for Vodafone’s numerous postpaid billing errors, even though the complaints data makes it obvious that Vodafone has, and continues to have, a huge problem with the accuracy of bills. The only fine relating to treatment of postpaid customers was given because of Vodafone’s failure to handle their complaints properly – although the reason Vodafone was overwhelmed with complaints was because so many postpaid customers were unhappy with their bills!

In fact, Ofcom closed their investigation into Vodafone overbilling months before the supposedly unrelated fines were issued to Vodafone. Ofcom concluded their investigation into Vodafone overbilling by stating that you can have smoke without a fire:

…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.

I talk off-the-record to staff responsible for billing accuracy in other UK telcos, and it has become clear they are increasingly fed up with the Ofcom’s inconsistent behavior. Consider the following:

  • EE was fined GBP2.7mn (USD3.3mn) for overcharging 40,000 mobile customers and Vodafone was fined GBP3.7mn (USD4.6mn) for overcharging 10,000 prepaid mobile customers. But Vodafone has never been fined for overcharging postpaid mobile customers, despite two years of record levels of complaints from postpaid customers who say they have been overbilled.
  • Ofcom takes a very loose approach to categorizing complaints data, using just three exceedingly broad categories. However, it is unusual for any telco to receive most complaints in the ‘billing, pricing and charges’ category. This has been the top category for Vodafone complaints throughout the last two years. These Ofcom reports are supposed to increase transparency, providing consumers with useful information. So why does Ofcom never present the split based on category of complaint? Is it because almost all of these Vodafone complaints are driven by the same cause, and a comparison of billing complaints between telcos would make Vodafone’s failure look even worse?
  • The Q4 2016 complaints report was published just one week after Plusnet was fined for overbilling, leading Ofcom’s Consumer Group Director, Lindsey Fussell, to announce: “There can be no margin for error, and no excuses, when it comes to billing customers correctly.” So why is Ofcom writing excuses for Vodafone in to their own complaints report?

You can find the complete Ofcom Q4 2016 complaints report here.

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.