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Eircom could face €11.5m penalty for overcharging customers

The communications regulator claims Eircom has been overcharging around 71,000 of its customers by some €4.7 million over the last few years.

The Commercial Court heard Comreg has brought proceedings against Eircom Ltd, trading as Eir, under a legal mechanism which allows it to apply to the court to put an end to overcharging in circumstances where it is alleged the practice has been ongoing and where there is provision for a penalty of €11.5 million or an amount set by the court.

Eircom denies the claims and says while there has been incorrect billing, it is not on the scale alleged by Comreg.

The case was admitted to the fast track Commercial Court on Monday on the application of Eileen Barrington SC, for Comreg.  Ms Barrington said there was a mechanism in law under which Comreg can apply to end overcharging which has been going on since 2015 against a background of four sets of convictions for overcharging since 2015.

Claims fully in dispute

Jonathan Newman SC, for Eircom, said he was consenting to admission of the case to the commercial list because of an anxiety to progress the proceedings.

However, he also said, the claims are fully in dispute and while it is accepted there is incorrect billing, it is not on the scale alleged and there is also an issue as to whether fair procedures have been applied by Comreg.

Mr Justice Denis McDonald was satisfied to admit the case to the list in circumstances including where there has been a significant level of overcharging alleged and also having regard to the public interest in the proceedings as well as the impact on Eircom in the marketplace and its competitors.

He adjourned the making of directions for a week on how the case should proceed.

Comreg seeks orders under the Communications Regulation Act 2002 that Eircom cease contraventions of the Act including in relation to charging customers more than the charges set out in their contracts.  It also seeks that it refrain from charging customers where they have requested their service cease and from charging “early termination” fees.

Investigations

Miriam Kilraine, Comreg compliance operations manager, said in an affidavit Comreg had carried out a number of investigations over the last six years into repeated and recurring overcharging by Eircom.

Comreg believes the overcharging of Eircom customers “is widespread and ongoing and affects a very substantial number of customers monthly”.

The regulator has seen no evidence of any meaningful remediation by Eircom, no meaningful effort by it to proactively identify and address errors in its billing systems that cause the overcharging, she said.

Comreg believes it is necessary to seek the orders to bring Eircom into compliance with the company’s obligations under the law not to overcharge in circumstances where efforts by the regulator to encourage compliance have had no meaningful or enduring effect, she said.

Eircom has been convicted of 30 overcharging breaches in recent years, for which fines totalling €67,500 were imposed.

Remediation plans

Subsequently, two further investigations were carried out by Comreg.  Eircom, which committed to put in remediation plans following its convictions, including appointing a new head of customer advocacy and the publication of a code of practice, expressed concerns on grounds including the reasonableness and proportionality of the first investigation, claims which Comreg disputed.

When the second investigation began, Eircom maintained it was identical to the first investigation.  It also sought to justify the increase in customer complaints as being driven by the Covid-19 pandemic which it said impacted all operators, Ms Kilraine said.

Last April, Comreg wrote to Eircom setting out its findings from those two investigations. Among those findings were that Eircom’s billing systems and processes are not capable of proactively identifying instances of overcharging and Eircom’s approach to it is almost entirely led.

The information available shows that the amount overcharged in the period of the two investigations was at least €4.7 million affecting some 71,000 Eircom customer accounts, it said.

When Comreg notified Eircom of its intention to seek court orders, Eircom’s solicitors responded there had been inexcusable delay in doing so, a lack of fair or coherent procedure, that it was proceeding on speculative and factually incorrect infringements and there was a failure to acknowledge significant improvements in customer care, among other things.

Source:

www.breakingnews.ie

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