Ombudsman Orders O2 to Pay Up

Ombudsman orders O2 to pay up - and say sorry

But why did O2 spend an extra £450 to try and save £10?

Back in October I wrote about the problems my partner had leaving O2 Broadband (story here). O2 helped themselves to £40 from her bank account to cover cancellation charges - even though they said no cancellation charges were payable.

When I tried to get O2 to refund the money and pay £25 compensation they claimed they'd already repaid the £40 and wouldn't budge from their derisory offer of a £15 goodwill gesture for all the problems. 

In fact O2 hadn't refunded the money, and insisted we provide bank statements to prove we weren't lying. That was the final straw, so I took the case to the Ombudsman.

I mistakenly thought Ofcom were responsible for investigating broadband complaints, but I discovered the role has been outsourced to companies like Ombudsman Services who O2 subscribe to. That means O2 has to pay Ombudsman Services to resolve complaints when O2 fail to reach agreement with their customer. 

The Ombudsman charges the provider a case fee to 'encourage them to resolve complaints themselves'.

As O2 had failed to refund the £40 and refused to pay £25 for the numerous attempts we'd made to sort the problem out, I decided to increase the compensation request to 'a sum equal to the case fee O2 would incur for failing to resolve the complaint themselves'.

The administrator I spoke to nearly choked when I said this was what I wanted from O2, and told me there was no way that would be possible. 'Why?' I asked. 'Because of the level of the case fee' she replied. 'Is it a lot of money then?' I said. 'It's about £450...' then she went a bit quiet, probably realising what she'd just said.

So I wrote on the form I wanted '£50 or a sum equal to the case fee, whichever is greater'. I didn't want the Ombudsman to dismiss the case, as O2 had already admitted fault. 

I was mystified as to why O2 would incur a charge of £450 from the Ombudsman over their refusal to raise their offer of compensation from £15 to £25.  

Yesterday Ombudsman Services sent through their Final Decision. Unsurprisingly they ruled that O2 must:

• Refund the £40.
•  Provide a written apology for any shortfalls in customer service.
•  Provide a payment of £50 as a gesture of goodwill in recognition of any inconvenience caused during the dispute.    

 O2 admitted back in October they shouldn't have taken the £40. I asked the Ombudsman why on earth they would be so stupid as to incur a fee of £450 when they had already told the customer they had made a mistake? 

The Ombudsman told me that sometimes the telecom companies refer their complaints when they think the customer's claim for compensation is unjustified - in the hope the Ombudsman will agree. 

It doesn't make any business sense does it? 

Pay the Ombudsman £450 in the hope he'll agree you don't have to pay £25  compensation- even though you've already offered £15.

Perhaps an alternative explanation is that the telecom company hopes its disgruntled customers won't bother to make a formal complaint. 

This may very well be true. How many O2 customers do you think complained to Ofcom when O2's mobile service crashed last summer leaving millions of customers with no signal? The answer? Just 10 customers complained to the regulator.

We haven't received the letter of apology yet, or the £50. But O2 has refunded the £40.

After a promsiing start O2 remains a tiny player in the UK broadband market with just 600,000 customers. Make that 1 fewer.