TalkTalk and Tiscali pay £2.5m refunds for bogus bills

TalkTalk was threatened with fines from the regulator in November 2010

Two telecoms firms, TalkTalk and Tiscali, have repaid nearly £2.5m to customers who were billed for services that had been cancelled.

The regulator Ofcom received more than 1,000 complaints but estimated some 62,000 could have been affected.

The customers had typically complained about aggressive demands for the payment of bills they did not owe.

TalkTalk blamed a new billing system introduced after it bought Tiscali in June 2009.

"We are pleased that Ofcom has recognised the significant steps we have taken to fix the billing issues," a TalkTalk spokeswoman said.

Compensation

Ofcom said that the two firms, who together have 4.2 million customers, had taken steps to fix the problem.

An average of about £40 has been paid to thousands of customers in refunds or compensation payments.

People must be refunded if, since 1 January 2010, they have paid bills that should not have been levied.

And credit ratings agencies must be told to repair any damaged credit histories.

Ofcom launched an investigation in July 2010 about the case, following the complaints. The firms were told to pay compensation by December or face a financial penalty.

Fines have been ruled out by the regulator, for now, but it said it would continue to monitor the situation.