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The risk of delivering bad customer service: a fine of over €300,000

Would your business operate differently if you knew you risked an enormous fine for failing to fully resolve customer complaints? Does the thought of having to include a link to consumer protection laws make you a little nervous? Do you even know what the consumer protection laws are for the area in which you do business?

I’m asking because UK mobile provider Three was recently hit with a £250,000 fine by Ofcom, the nation’s communications regulator. The reason? Nothing but poor customer service. Yes: Three was accused of breaching Ofcom’s Code of Practice in the way they handled complaints.

Handle customer complaints in a ‘fair and timely manner’

Ofcom has laid out specific guidelines for how problems between mobile communications providers and their customers should be addressed. The Code also specifies that all paper bills sent to mobile telephony customers must inform them of their right to escalate any disagreements to an independent ombudsman in order to find a resolution.

But the most interesting part of this particular case is that Ofcom is clearly not afraid to use its powers to ensure that its rules are respected. In many countries, consumer protection bodies are toothless tigers who are able to register complaints but can’t – or aren’t willing – to do anything much about them. This leaves wronged consumers out of pocket and law-breaking businesses free to repeat their behaviour with impunity.

In the absence of extremely strict consumer rights laws – and a regulator that isn’t afraid to back them up – it’s inevitable that there will be cowboys out there in the business world. Dodgy businesses will come and go (word gets around faster than ever in these days of online transparency) but their operators aren’t the type to read customer service blogs. You are.

DIY, with Ofcom as your example

So, in fact, the lack of strong laws covering online customer service in most industries is a tremendous opportunity for you. Why? Because you can make your own – get started by basing them on Ofcom’s guidelines if you like – and make sure you follow them to the letter. It’s the good old carrot-and-stick approach, except in this case the stick (the threat of a hefty fine) is completely imaginary. The carrot is the reward of loyal customers, with the added bonus that you’re going to win over far more customers if you apply Ofcom-style guidelines to your company’s customer service.

I’m not suggesting that you include links to the legal recourse your customers have if they’re not happy with the service they receive (apart from anything else, it probably wouldn’t create a very good impression). But you should definitely be very clear about the applicable statutory rights in your jurisdiction, for example distance selling regulations, as well as your own company’s policy if its terms are more generous than required by law.

These things, while apparently simple, are rarely done by SMEs; they’re much more common in bigger businesses. Which is a shame because as a customer, when you know exactly where you stand with a transaction, you’re more likely to take the plunge and decide to part with your hard-earned money.

Up your own customer service game

When communicating with customers, be clear, be efficient, and treat them with respect. Work hard to do that and, even if you occasionally slip up and misfile or forget a customer service email, remember the long game of customer service: you might take a hit on an individual transaction, but are likely to make up for it in the long run – thanks to the goodwill your great service generates.