CALL files a £589 million compensation claim against BT Group

Written by: Wajeeh Khan
January 18, 2021
  • CALL files a £589 million compensation claim against BT Group.
  • BT allegedly did not compensate fixed-line customers for overcharging.
  • The British multinational says it strongly disagrees with the lawsuit.

A consumer campaign group lodged a roughly £600 million claim against BT Group plc (LON: BT.A) on Monday that said the telecommunications operator did not compensate fixed-line customers for overcharging. Many of the affected, the lawsuit added, were elderly.

BT Group slid close to 1.5% in premarket trading on Monday and lost another 1% on market open. At 138 pence per share, the London-listed stock has recovered roughly 40% since the last week of October 2020 – a good news for value investors.  

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CALL (Collective Action on Land Lines) said that the British multinational continued to increase the price of its services over several years while the overall cost attributed to service provision was actually declining.

In separate news from the United Kingdom, utility company Centrica plc named Kate Ringrose as its new Chief Financial Officer on Monday as Johnathan Ford announced resignation citing personal reasons. Ford served the company as its CFO for seven months.

BT agreed to slash its prices by £7 a month in 2017

BT Group had announced plans of slashing its charges for the landline-only customers by £7 a month in 2017, after Ofcom (UK’s telecoms operator) expressed concerns that such customers were facing unjustifiably higher prices.

On Monday, however, CALL said that the telecommunications holding company failed to properly compensate its customers for past overcharging. The lawsuit filed with the executive, non-departmental public body, Competition Appeal Tribunal, is valued at £589 million and demands that BT Group pays up to £500 each to 2.3 million of its customers that were affected by the unreasonably higher charges.

The claim also wants the British multinational to compensate those customers that subscribed to its landline and broadband service (not as a package). BT also excluded such customers from its price cut in 2017.

BT Group expresses disagreement with the lawsuit

BT Group expressed its strong disagreement with the lawsuit on Monday as it stated:

“We take our responsibilities to older and more vulnerable customers very seriously and will defend ourselves against any claim that suggests otherwise.”

In October 2020, BT Group warned that its profits were unlikely to return to pre-COVID-19 levels before 2022-23.

BT Group performed largely downbeat in the stock market last year with an annual decline of more than 30%. At the time of writing, the telecoms operator is valued at £13.63 billion and has a price to earnings ratio of 9.05.