BT faces £600m lawsuit for 'overcharging' landline-only customers

landline phone
(Image credit: / Gajus)

BT plans to “vigorously defend” itself against a class-action lawsuit that alleges the company didn’t adequately compensate customers who were overcharged for landline services over an eight-year period.

An Ofcom investigation in 2017 concluded that although the wholesale cost of providing landline services had fallen by 25% since 2009, telcos had actually increased line rental by up to 40% during the same timeframe.

This trend disproportionately impacted those took a landline but no other services such as television or broadband, meaning elderly households were more likely to be affected. Ofcom noted at the time that 66% of such customers were aged 65 or over and 77% had never switched provider.

BT broadband

As the market leader, BT was subject to additional scrutiny. Especially since many of the affected customers had been with the company for decades, leading to suggestions their loyalty had been exploited.

In response to the regulator’s findings, BT reduced prices by £7 a month. However, telecoms consultant Justin Le Patourel and founder of the Collective Action on Landlines (CALL) believes this remedy wasn’t sufficient.

CALL has instructed law firm Mischon de Reya to file a claim worth £600 million at the Competition Appeal Tribunal (CAT). If successful, as many as 2.3 million people could be entitled to a £500 compensation payment.

“Ofcom made it very clear that BT had spent years overcharging landline customers, but did not order it to repay the money it made from this,” he told the BBC.

“We think millions of BT's most loyal landline customers could be entitled to compensation of up to £500 each, and the filing of this claim starts that process.”

BT has rejected the accusations, noting that it considered the case to be closed three years ago. It added that it had diversified its product portfolio and offered additional support to its most vulnerable customers. It also notes that it offers free data, minutes and texts to those who needed it the most.

“We strongly disagree with the claim being brought against us,” said a spokesperson. “For many years we’ve offered discounted landline and broadband packages in what is a competitive market with competing options available, and we take pride in our work with elderly and vulnerable groups, as well as our work on the Customer Fairness agenda.

“We assure our customers, including the elderly and vulnerable, that we will not let this claim disrupt the relationship BT has with them particularly at this critical time, when our people have been working so hard to keep them connected with their loved ones. 

“We will continue to offer a variety of packages to support our customers through the pandemic.”

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.