Plusnet fined £880,000 for billing former customers

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.

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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."