Vodafone UK Challenged About PAYG Errors

Another week passes, and there is yet another negative story about Vodafone UK and the way it struggles to present customers with accurate charges. But whilst a surge in complaints from postpaid customers prompted the British press to demand ‘multi-million’ pound fines, UK regulator Ofcom now believes that Vodafone seriously screwed up the charges issued to some of its prepaid customers. Ofcom issued a noteworthy official update to an ongoing investigation into how Vodafone has treated Pay-As-You-Go customers. The update reads:

Following an investigation, Ofcom has determined that there are reasonable grounds for believing that Vodafone contravened GCs 23.2(a) [the rule that says telco marketing must be honest] and 11.1 [the rule that says telcos should not overcharge]…

Specifically, Ofcom has reasonable grounds to believe that Vodafone engaged in conduct contrary to the relevant conditions when selling pre-paid mobile telephony (PAYG) services to its PAYG customers and rendering bills to such customers that did not represent the true extent of the service actually provided to them.

The incompetence of Vodafone UK generates so many Commsrisk stories that I am minded to create a spin-off site at Vodafonerisk.com. That said, it would not surprise me if this announcement is an example of Ofcom playing politics to forestall the criticism they also deserve.

Vodafone’s prepaid and postpaid charging has long been subject to a regulatory-mandated audit which Vodafone has always passed. Ofcom spent months investigated errors with Vodafone’s postpaid billing only to conclude no action was necessary. But within weeks of reaching that conclusion Ofcom published data which showed a huge rise in complaints from Vodafone postpaid customers, which lead to a series of damning headlines from the British press. Some journalists seemed to believe that Ofcom must take action to punish Vodafone for its postpaid billing errors – even though this would require a massive and embarrassing u-turn. This latest announcement about prepaid charging gives Ofcom the opportunity to flex its regulatory muscles, whilst sidestepping any uncomfortable questions about its previous leniency.

Rather than boosting customer confidence, the arbitrary and opaque regulation of UK telecoms charging accuracy has resulted in record numbers of complaints and terrible press headlines. This is because the regulations have been designed to maximize the convenience for the regulator and its allies in telcos. Customers deserve better. They should be protected by a straightforward and transparent testing regime that executes a consistent and independent test plan to objectively measure the accuracy of every telco’s charges. Otherwise telcos will be dogged by the kinds of scandals that currently surround car manufacturers; if tests are not performed in an identical fashion then some businesses will be tempted to manipulate the results. Sadly, this latest example of the regulator’s politicking shows they are more interested in saving face than admitting their existing audit regime has repeatedly failed.

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.