Upheld: billing error leading to incorrect arrears placement and service restriction complaint against Telefonica UK Limited trading as O2

Decision detail

Summary

Miss H complained that O2 incorrectly placed her account into arrears following an erroneous £36.11 refund in October 2025, leading to service restrictions, repeated payment demands, and distress. O2 accepted the error and paid £50 compensation, but Miss H considered this insufficient. The ombudsman found that the combination of O2's error, the period of service restriction (including two days of complete loss of service), inconsistent information provided to Miss H, and the considerable effort required to resolve the matter warranted higher compensation. The ombudsman upheld the complaint and ordered O2 to pay total compensation of £200 and ensure no adverse credit file information was recorded.

The Ombudsman's reasoning

The ombudsman found that O2's error was not in dispute and focused on whether the remedial steps were fair and proportionate. The ombudsman rejected O2's argument that Miss H could have repaid the amount herself, as it would be unfair to expect her to correct O2's error, particularly when given inconsistent information. The ombudsman considered the significant impact on Miss H, including considerable time and effort to resolve the issue, conflicting information received, service restrictions including a two-day complete loss of service, and Miss H's personal circumstances (supporting her father's recovery and work difficulties). The ombudsman concluded that £50 did not fairly reflect the distress and inconvenience caused, and that £200 total compensation was appropriate given the combination of O2's error, service restriction period, inconsistent information, and effort required by Miss H.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website