BT faces possible £500m claim for overcharging landline-only customers

In 2018, BT had agreed to reduce its landline prices from £18.99 to £11.99 a month for about 900,000 customers

A class action lawsuit has been filed against BT at the Competition Appeal Tribunal (CAT) over claims the company overcharged more than 2.3 million residential, landline-only customers for nearly eight years.

The case has been filed by Justin Le Patourel, a representative of CALL (Collective Action on Landlines), and seeks compensation for customers who are claimed to have been overcharged by BT for many years. If successful, the claim could result in compensation of between £200 and £500 for each affected customer, up to a total of an estimated £500 million, according to CALL.

The claim relates to regulator Ofcom's 2017 finding that BT's landline-only customers were getting poor value for money compared to customers who bought bundles of broadband, landline and/or pay-TV services.

The regulator found that the company had raised its prices many times since 2009, despite a constant decline in the cost of providing landline service to customers. [see update below]

Ofcom also found that the customers affected by BT's overpricing were likely to be elderly people from low income groups. The regulator said that such elderly customers tend not to purchase bundled services, instead sticking with the same rental product for years.

As a result of Ofcom's finding, BT agreed to reduce its landline prices from £18.99 to £11.99 a month for nearly 900,000 vulnerable customers, although it did not compensate customers for the elevated prices they had paid from 2009 to April 2018.

This is something CALL is seeking to address.

"CALL has been created to campaign for compensation from BT, which could total over £500 million," the group's website states.

The period covered by Le Patourel's claim is 2015 to 2019 rather than back to 2009, since the relevant legislation does not cover the full period.

A BT spokesperson said that the company strongly disagrees with the overpricing claim and intends to defend itself "vigorously" in the court.

"We take our responsibilities to older and more vulnerable customers very seriously, every day, and struggle to see the validity of this claim," the spokesperson told ISPreview.

"For many years we've offered discounted landline and broadband packages.

"We continue to offer a variety of packages to support our customers through the pandemic."

Update: The article originally said Ofcom found that BT had been overcharging its landline customers (without broadband connection) since 2009. This report did not single out BT, but referred to the industry as a whole. In April 2018 BT dropped its monthly landline-only prices by £7 to £11.99. In a statement the company said:

"BT regrets being drawn into litigation on a topic which Ofcom considered more than three years ago. At that time, Ofcom's final statement made no finding of excessive pricing or breach of competition law more generally. The claim seeks to hold against BT the fact that it implemented a voluntary commitment to reduce prices for customers that have a BT landline only and not to increase those prices beyond inflation (CPI)."