BT Group stock price slips as it faces a £600 million lawsuit for overcharging customers
- The telecom giant BT Group is facing a lawsuit for allegedly overcharging its users for landline services
- In the past, the British regulator Ofcom accused telecoms of treating their landline customers poorly
- BT Group stock price trades about 2% lower this week, just a few days after printing a 10-month high of 148p
Shares of BT Group (LON: BT.A) are trading about 2% lower in the past two days after the company was served a £600 million lawsuit for overcharging its landline customers.
Fundamental analysis: Major accusations launched towards BT
The telecom giant BT Group is facing a lawsuit filed by a group of its customers accusing them of overcharging its users for landline services. This is a continuation of accusations outlined earlier when British regulator Ofcom accused telecoms of treating their landline customers poorly.
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“Ofcom made it very clear that BT had spent years overcharging landline customers, but did not order it to repay the money it made from this,” said Justin Le Patourel, founder of consumer group Collective Action on Landlines (CALL).
“We think millions of BT’s most loyal landline customers could be entitled to compensation of up to £500 each, and the filing of this claim starts that process,” he added.
On the other hand, BT Group said the allegations against the company are not true and it will fight back “vigorously” in court.
“For many years we’ve offered discounted landline and broadband packages in what is a competitive market with competing options available, and we take pride in our work with elderly and vulnerable groups, as well as our work on the Customer Fairness agenda,” BT spokesman said.
If successful, BT Group would be forced to pay about £500 to each of its 2.3 million landline customers.
Technical analysis: Stock price retreats
BT Group stock price trades about 2% lower this week, just a few days after printing a 10-month high of 148p. Overall, shares are up about 4.5% in January.
The price action is now approaching a key short-term resistance line around the 155p mark, consisting of the multi-year descending trend line and the 100-DMA.
A class-action lawsuit against BT Group has been filed for allegedly failing to compensate its customers who were previously overcharged for landline services.