Botched IT migration cost Vodafone customers thousands

Vodafone has been fined more than £4.6m by telecoms regulator Ofcom over multiple serious and sustained breaches of its code of practice that occurred during a complex IT migration onto a new billing platform.

An investigation launched in 2015 found that 10,452 Vodafone customers on pay-as-you-go contracts lost out after the operator failed to credit their account when they had topped up. Those affected lost a total of £150,000 over about 17 months.

The failure occurred because of errors made during a major IT migration that saw 28.5 million customer accounts and one billion individual customer data fields moved from seven legacy billing and services platforms to a single system.

In common with the rest of the industry, Vodafone disconnects inactive pay-as-you-go accounts after 270 days have passed. At that time, the operator puts the customer’s SIM card into a state known as “pre-disconnection” for 24 hours before removing it from the network.

Because it hit problems in transferring accounts to the new system, Vodafone stopped disconnecting SIMs in the pre-disconnection state, and consequently customers were still able to pay for top-ups when they should not have been. Although the system issued them with receipts, Vodafone did not actually credit their accounts.

The second investigation uncovered breaches of the rules governing customer complaints. Ofcom found that Vodafone did not give its customer service staff clear enough guidance on what a complaint actually was, while its processes were insufficient to ensure complaints were dealt with or escalated appropriately.

Vodafone also failed to instruct customers of their right to take unresolved complaints to the telecoms ombudsman schemes.

“Vodafone’s failings were serious and unacceptable, and these fines send a clear warning to all telecoms companies,” said Ofcom consumer group director Lindsey Fussell.

“Phone services are a vital part of people’s lives, and we expect all customers to be treated fairly and in good faith. We will not hesitate to investigate and fine those who break the rules.”

In a statement responding to Ofcom’s announcement, Vodafone said: “We deeply regret these system and process failures. We are completely focused on serving our customers. Everyone who works for us is expected to do their utmost to meet our customers’ needs, day after day, and act quickly and efficiently if something goes wrong.

“It is clear from Ofcom’s findings that we did not do that often enough or well enough on a number of occasions. We offer our profound apologies to anyone affected by these errors.”

The operator has fully refunded or re-credited 10,422 out of 10,452 affected customers with an average of £14.35. The remaining 30 customers were untraceable – presumably having left the UK – so it has made a £100,000 donation to a number of charities.