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BT shares slump as it faces £600m legal challenge

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LaToya Harding
·Contributor
·2-min read
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A jogger runs in Primrose Hill park with the BT Tower on the skyline in London on January 12, 2021 as life continues under Britain's third lockdown since the start of the coronavirus pandemic. - People who flout coronavirus lockdown rules are putting lives at risk, the British government said on Tuesday, as cases surge to record highs and rumours swirl of potentially tougher restrictions. (Photo by JUSTIN TALLIS / AFP) (Photo by JUSTIN TALLIS/AFP via Getty Images)
A jogger runs in Primrose Hill park with the BT Tower on the skyline in London on January 12, 2021 as life continues under Britain's third lockdown since the start of the coronavirus pandemic. - People who flout coronavirus lockdown rules are putting lives at risk, the British government said on Tuesday, as cases surge to record highs and rumours swirl of potentially tougher restrictions. (Photo by JUSTIN TALLIS / AFP) (Photo by JUSTIN TALLIS/AFP via Getty Images)

Shares in BT (BT-A.L) fell almost 3% on Monday morning after it was revealed the telecommunications company faces a class action lawsuit over allegations it overcharged landline customers.

The £600m ($811m) claim, lodged by a consumer campaign group, was made on Friday for overcharging its users, particularly the elderly and the vulnerable, who had its landline-only deal between 2015 and 2018.

About 43% of landline-only customers are aged 75 and over, according to telecoms watchdog Ofcom.

The group, Collective Action on Land Lines (CALL), said that BT failed to make up for significantly hiking prices for customers over several years, even though costs for providing the service had fallen since 2009.

However, the claim can only go back to 2015 due to current legal rules introduced that year.

BT slumped on the back of the news on Monday. Chat: Yahoo Finance
BT slumped on the back of the news on Monday. Chat: Yahoo Finance

In 2017, Ofcom discovered that BT had been overcharging millions of landline customers, and the company agreed to reduce its prices by £7 each month (£84 per year), with costs falling from £18.99 per month to £11.99.

But CALL said BT did not properly address past overcharging. Its £589m claim, filed with the Competition Appeal Tribunal, sought payments of up to £500 for each of the 2.3 million BT customers affected.

The case is being brought by law firm Mischon de Reya and Justin Le Patourel, a telecoms consultant who worked for Ofcom for more than a decade. If successful, those affected would be entitled to between £200 and £500, according to the claim.

READ MORE: Ofcom fines BT £6.3m for breaking rules over Northern Ireland contract

In a statement BT said: “We strongly disagree with the claim being brought against us and will vigorously defend ourselves.

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

Rocio Concha, Which? director of policy and advocacy, said: "Which? has campaigned long and hard for an effective collective redress scheme, but with no claim under the new regime reaching a full trial, consumers have not yet had the results they need.

"If successful, this opt-out action would be welcomed by many BT customers who were found to have been historically overcharged for years, but saw no refund as a result."

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