O2 has been ordered to pay £10.5 million after an investigation discovered the company had wrongly charged 250,000 customers who had left its service over an eight-year period.
Regulator Ofcom found that the mobile network provider had incorrectly billed customers that had left, which is in breach of consumer protection rules.
Mobile companies are bound by law to provide a final bill when a customer leaves the service, outlining any further charges and fees that may be payable before the account closes.
However, between 2011 and 2019, a mistake in O2's systems meant that many people who were receiving their final bills for a monthly contract were billed twice.
Overall, some 250,000 customers were charged incorrectly, which amounts to £40.7 million, Ofcom said.
Of that number, some 140,000 paid the extra charges, which totalled up to £2.4 million.
O2 noticed the problems with its billing system back in 2011, but failed to address the problem sufficiently, meaning that customers continued to be charged, the regulator added.
Ofcom enforcement director, Gaucho Rasmussen, said: "Mobile customers trust their provider to bill them correctly and fix any errors as quickly as possible. But these billing issues continued for a number of years without sufficient action from O2, and thousands of customers were overcharged as a result.
"This a serious breach of our rules and this fine is a reminder that we will step in if we see companies failing to protect their customers.
"O2 has refunded the customers who were affected, and we are satisfied the company has taken action to prevent this happening again."
The company says it has refunded the customers affected by the error in full, as well as an added four percent interest.
O2 has also made an equivalent charitable donation for customers that it was unable to reach. It claims to have also changed its billing processes to make sure the issue does not resurface.
However, if you can prove you were affected and have not yet received compensation, you can contact O2 directly to raise the issue.
A spokesperson for the company apologised to the affected customers.
They said: "As the operator proactively driving over £168m value back to our customers in the last year alone, we are disappointed by this technical error and sincerely apologise to customers impacted.
"As Ofcom have stated today, the vast majority of funds reported were not overpaid. Only 6% - £2.4m - relates to money that was overpaid by customers.
"We identified the issue ourselves and notified our industry billing auditor. We have also taken proactive steps to refund all impacted customers for the extra charges they paid, plus an additional 4%."
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