on: 30/07/2019 | 07:02 - edited: 30/07/2019 | 08:43
Hello everyone,
I have an update for you all on the billing issue that came to light last year, in 2018. As you know, as soon as we found out about it, fixed it, and began to refund our members, we also informed Ofcom, the telecoms regulator. Over the past year, we have been working with them as they took a closer look at the issue and opened an investigation to examine whether there are grounds to believe giffgaff charged members incorrectly.
Following this investigation, Ofcom have announced today that they plan on fining us £2 million; however, as we agreed to enter into Ofcom’s settlement process this will be discounted by 30% to £1.4 million. As a business, we have already begun - and will be fully - implementing the recommendations within Ofcom’s final decision.
While Ofcom was conducting their investigation, we made the decision to set aside some funds from our 2018 profits to use in case of a fine. Because of that, we’re able to make sure that this cost will not be passed onto you and it won’t affect the cost of goodybags and/or credit.
I’d also like to personally thank everyone in the community for how they’ve supported other members who were affected by this. We always say that giffgaff is nothing without its members and that is never truer than when everyone pulls together, even in a situation that isn’t the best.
We’ve taken major steps to refund the members affected; however, for those whose records we were not able to hold on to, and who we haven’t been able to get in touch with, we’ve made the decision to do something different. We have estimated the potential impact this issue would have had. We did this by looking at our existing data, and used it to project the impact between the time when this issue began, arriving at a figure of £752,257. Clearly, this money doesn’t belong to us, so we will be donating this amount entirely to charity.
Our most dedicated members nominate charities every six months to be the recipient of Payback donations, and we will be splitting this amount evenly between the ten charities that have been shortlisted over the last twelve months, to make sure it is going to causes that giffgaff members care about.
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.
Ash Schofield - CEO
Timeline
If there is anyone who might have missed this happening or wants clarification on what happened, then I have outlined the timeline of events below. If anyone wants to check the status of their refund, or if they think they are still owed money from us, you can check by entering your account details into this web app.
In May 2018, we discovered a billing issue that arose from a member complaint. We investigated this and it transpired a billing issue in relation to data had began in May 2011. In June 2018 we fixed it, informed you and Ofcom and began to pay everyone affected whose records we held between the period of June 2016 to June 2018 back.
The data issue affected members who had been using mobile data on their airtime credit, who then bought a goodybag, and continued to use mobile data. They continued to be charged from their credit after the goodybag was bought, instead of using the goodybag’s data allowance.
This issue affected 2.6 million members in total and £2.1million was refunded to 1.2 million members.
Our investigation showed that 90% of members affected were to be refunded £5 or less.
By mid - November we paid all existing members back between the above time period and, over the past few months, have been trying to reach those members who have left giffgaff, so that we can give them their money back.
For the 1.4million unrefunded members whose records we no longer hold for the period of the 26th May 2011 to 31st May 2016, we will be donating the sum to charity.
During Ofcom’s investigation we took a closer look at our systems, and in February 2019 we discovered that this issue also had a voice call related element to it. For the approximately 6,000 members for which we hold call data records between January 2018 until February 2019, we have refunded them directly a total sum of £8,591. For the approx 20,183 members affected that we haven’t been able to identify during the time period before this, we will be donating the sum to charity.
Today, Ofcom announced they would be fining us £2 million with a 30% discount, making the final figure £1.4million.
Today, we have informed you of this decision and, of course, if any member has any questions on the matter, we’ll do our best to answer these. You can do that by leaving a comment below.
As outlined above, we will be making steps to ensure that for those 1.4 million members we weren’t able to refund relating to both the voice and data billing issue we will be donating the sum of £752,257 evenly to ten charities that we know mean a lot to our members.
If anyone wants to check the status of their refund, or if they think they are still owed money from us, you can check by entering your account details into this web app.
Cheers for letting us know @vespaash2, that's a big fine and probably deserved to be honest, hopefully it'll not happen again, but I suppose the charities will be happy at their windfall.
Firstly, it is reassuring to know that on some occasions you will be coming to the forum to explain mistakes. If you could do the same and post a response in this thread - which also casts a shadow over the integrity of giffgaff - as members have been asking then it, too, would be welcome.
Secondly, I am pleased that as usual the company has gone about fixing an issue such as this in the right way and the money that giffgaff can't return will be donated to various charities nominated by members during the last year.
I am however very concerned about this mistake with billing - not because it happened but because it apparently took over two years to pick up, and then was discovered only because a member complained. There must have been many, many members in those two years who contacted agents about this issue so what were they being told in reply and why didn't alarm bells ring? How many members failed to make a complaint to giffgaff.com but simply registered their displeasure by porting out to another network? The relevant KB article states that the issue ended in June 2018 when a fix was applied, but in fact it recurred temporarily between 11:16am on January 23rd 2019 and 17:35pm on January 24th 2019. Fortunately, on that occasion the issue was spotted and dealt with.
While it is a crumb of comfort that giffgaff has had the fine reduced from £2 million to £1.4 million, this is still a huge amount of money for a company the size of giffgaff to have to pay out and yet again it finds itself in the news for the wrong reasons. Unfortunately, the public often remembers what a company has done wrong rather than how it tried to fix its mistake.
Your OP says, "While Ofcom was conducting their investigation, we made the decision to set aside some funds from our 2018 profits to use in case of a fine. Because of that, we’re able to make sure that this cost will not be passed onto you and it won’t affect the cost of goodybags and/or credit. "
I am sorry, but I don't accept this as a valid argument. Had giffgaff not been fined then the cost of the £5 and £7.50 goodybags could have remained the same. Instead, despite a very long thread complaining bitterly about the spurious reason for increasing the prices to £6 (this being the most unpopular) and £8 goodybags, the increase went ahead. So no, you might not be passing on the cost of the fine to us now - but you have already done so with these increases to the lighter user.
Moreover, had giffgaff not had to set aside this money out of profits it could have been used instead to benefit the company and members.
Please, let us now draw a line under these banana skins.
How dare you say you won't pass on the fine to customers - utter disgrace to even mention or consider it! You overcharged and say you won't make us pay for your error? You then increase goodybag prices at the lower-end? All beginning to leave a sour taste I'm afraid, will be looking to move several accounts away now.
Hey @essie112mm , good questions - I'll answer as best as I can.
We share your disappointment that this happened. Since it came to light we've been taking a close look at what improvements we need to make to our processes and governance to make sure we pick up on issues like this much earlier. We've already put measures in place, both in our monitoring and in our escalations process, to make sure that we can pick up on issues more quickly.
Thanks for flagging the KB article - we put that up as a resource for people when the issue first came to light, and hasn't been fully updated in line with the following developments. I've published an update this morning so that when people visit it, they'll get the right information.
The changes to what are now the £6 and £8 goodybags were entirely unconnected to the fine in this case. As a business, we need to make changes to our goodybags where necessary to make sure we're offering the right products for members, as you'll have seen over the years.
giffgaff community staffer - let me know if you want to chat about anything. You can send me a message and we'll get rolling. Need a topic? Try here.
Thanks for picking up on a few points from my post. I do think that this issue adds weight to the call for itemised billing however.
As regards the rise in goodybag prices, I accept the argument that changes to products have to be made but the problem with the goodybags in question is that members made very clear that giffgaff wasn't listening to their needs and the episode has left behind a lot of dissatisfaction. This has been compounded by the recent very generous increase in data allowances to other goodybags. Unfortunately this fine has rubbed more salt into the wound.
I am glad giffgaff are paying for their mistakes, and not making the customer pay for it, that wouldnt be good.Well thinking about it, us lower goodybag users are paying for it, as our prices went up
