Telecoms firm Plusnet has been fined £880,000 by regulator Ofcom, after the company billed more than 1,000 broadband and landline customers for services they had already cancelled.

An error in Plusnet's billing system meant that cancelled lines were still recognised as 'live', resulting in 1,025 former customers being overcharged by more than £530,000 in total.

The customers are believed to have been overcharged between 7 March 2008 and 3 September 2015, with each owed on average £517.

Ofcom has been investigating the mistake since May 2016 and today announced that the BT-owned provider broke billing regulations.

However, the £880,000 penalty includes a 20% discount to reflect "Plusnet's co-operation in settling" the matter – meaning the full fine would have reached £1.1 million if the firm hadn't been so forthcoming.

For how to find the best broadband deals and our current top picks, see our Cheap Broadband Deals guide.

Martin Lewis
Get Our Free Money Tips Email!

Hundreds of customers yet to be refunded – what to do if you're affected

Plusnet has refunded 356 affected customers to date, paying out a total of £212,140 – which includes interest at a rate of 4% for each customer.

Asked about the 669 people yet to be refunded, Plusnet told MoneySavingExpert.com that it had "made every effort to contact [them] multiple times, including writing, calling and emailing".

It has now donated the remaining unrefunded payments to charity. But if you're a former customer and you believe you're entitled to a refund, you can call the firm on 0845 1400 082. If you're found to be owed money, Plusnet says it'll honour your refund.

In a statement the company said: "We are very sorry and would like to apologise to the 1,025 customers affected. We reported this ourselves to Ofcom, and made every effort to contact these customers to arrange a full refund before the investigation started. We would also like to reassure all customers this was an isolated historic issue and we have implemented a number of new robust measures to make sure this doesn't happen again."

Announcing the penalty, Ofcom's consumer group director Lindsey Fussell said: "There can be no margin for error, and no excuses, when it comes to billing customers correctly.

"This fine should serve as a reminder to telecoms companies that they must adhere to Ofcom's billing rules at all times, or face the consequences."

Have your say