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October 26, 2016updated 28 Oct 2016 2:23pm

Ofcom hits Vodafone with £4.6 million fine for IT migration failures

A botched project at Vodafone led to many customers being incorrectly billed before the problems were exposed in an Ofcom investigation.

By Alexander Sword

Ofcom has fined Vodafone £4,625,000 for breaches of consumer protection rules after a troubled IT migration project.

Vodafone must now pay the sum to Ofcom within 20 working days so that it can be passed onto the Treasury.

The fine was the result of two investigations by Ofcom: one found that Vodafone had failed to credit the accounts of over 10,000 pay-as-you-go customers, costing them £150,000 over a 17-month period.

Ofcom also found that Vodafone had failed to properly identify or address these problems, only responding when Ofcom intervened.

The second investigation found that Vodafone had failed to comply with customer complaints rules, including ensuring that customer service agents had proper guidance and failure to notify them of problems in writing.

Vodafone

Vodafone customers were impacted in the IT migration.

Beginning at the end of 2013, Vodafone attempted to move more than 28.5 million customer accounts and almost one billion individual customer data fields from seven legacy billing and services platforms to one, state-of-the-art system.

The migration of its billing system was intended to simplify the operation of customer accounts and open up services such as ‘click and collect’, but ended up sending customers the wrong bills and information.

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Some customer accounts were migrated incorrectly, leading to mistakes in the records stored on the new system.

Vodafone said in a statement that it had now fully refunded or re-credited 10,422 customers out of the 10,452 affected. The average refund per customer was £14.35.

It also invested in customer service resources and conducted a full internal review.

Ofcom revealed in its quarterly telco complaints report that complaints about Vodafone’s mobile services veered sharply away from its competitors.

They rose from 15 per 100,000 in Q4 2014, to 32 per 100,000 by the same time the following year. The more than doubling took place between Q2, where the figure was 14 per 100,000, and Q4 2015.

David Cheetham, market analyst at XTB.com, said: “With the matter now put to bed, investors will hope that the firm can move on and look to build on a solid if not spectacular year so far which has seen the stock rise around 10 percent.”

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