Giffgaff fined after overcharging millions of customers

The firm, which piggybacks on the O2 network, offers its customers prepaid bundles of texts, calls and data known as 'goodybags', as well as top-up credit.

But between May 2011 and June 2018, a system error meant millions of customers were charged again for data  included in their goodybags.

Giffgaff has already paid back £2.1 million to customers, with most being owed less than £5, although some may still be due a refund. 

And today communications regulator Ofcom has fined the firm £1.4 million. This includes a 30% reduction as Giffgaff reported the issue to Ofcom and took steps to fix the problem, and has agreed to settle the case.

See our Cheap Mobile Tips guide for help cutting the cost of your phone bill.

Why is Giffgaff being fined?

When a customer buys a 'goodybag' of texts, calls and data, this should be applied to their account immediately. 

But the system error meant goodybags were only applied to accounts when customers had ended the voice call they were on, or started a 'new data session' – for example, by turning their phone off and on again. 

This delay meant customers had to pay for any calls or data out of their credit rather than from their goodybag allowance – so in effect they paid twice until the goodybag was applied. 

The data issue was fixed in June 2018, while the call issue wasn't discovered until February 2019.

Giffgaff must pay the fine within 20 working days, and must also pay an extra £50,000 after failing to provide accurate information in response to requests from Ofcom. 

I've been overcharged – what can I do?

Giffgaff says it's already paid back any overcharged customers whose records it held between June 2016 to June 2018.   

It says it's been trying to contact customers who have left Giffgaff to give them a refund, but if you haven't heard anything you can check whether you're owed using its web tool. 

Giffgaff also says there are 1.4 million customers who haven't been refunded for the period between May 2011 and May 2016, because it no longer holds their records. Their refunds, worth over £750,000, will be donated to charity. 

But if you think you've been overcharged during this period, you can still get in touch with Giffgaff with any bills or records you have of your account from this time.

You can complain by calling 0330 041 4802, sending an email to its complaints department or writing to Complaints, Giffgaff Ltd, Belmont House, Belmont Road, Uxbridge UB8 1HE. 

What does Giffgaff say?

Giffgaff chief executive Ash Schofield said the firm had set aside money from its 2018 profits to pay the fine and would make sure the cost wasn't passed on to customers.

He said: "On behalf of everyone at Giffgaff, I'd like to apologise again to all those members affected by this and thank you for your ongoing support."